The performance of servovalve driven by giant magnetostrictive actuator is seriously affected by temperature rising. In order to reduce the error from temperature rising, a giant magnetostrictive actuator applied in servovalve was presented and its working principle was introduced. The output displacement error of actuator from rising of temperature was controlled by cooling and compensating. In order to analyze the influence of heat on the accuracy of giant magnetostrictive actuator, heat transfer model was deduced from the theory of heat conduction and transversal heat transfer, the steady-state temperature on giant magnetostrictive rod and shell were given, and the simulation results were verified by numerical simulation. The results showed that when the velocity of oil surrounding giant magnetostrictive rod was more than 0.1m/s at control current of 1A, temperature of giant magnetostrictive rod and shell was about 20.3℃, the difference in temperature can be limited below 0.2℃, and temperature rise of giant magnetostrictive actuator was small. The displacement error from heat was derived based on the model described the temperature on giant magnetostrictive rod and shell. The simulation results showed that when the velocity of oil surrounding giant magnetostrictive rod was more than 0.1m/s, the output displacement from heat was less than 0.1μm.