Ferromagnetic shape memory alloys (FSMAs) have been studied for possible applications of fast responsive and high power, yet light weight actuators controlled by magnetic field. There are three approaches that have been proposed in the FSMA research community, (1) martensite variant mechanism by applied (constant) magnetic field (variant rearrangement mechanism used by the others) (2) magnetic (H) field induced phase transformation and (3) hybrid mechanism controlled by applied magnetic field gradient. We have identified that the third approach, hybrid mechanism, can produce large force and reasonably large stroke with fast response because it can be driven by a compact electromagnet with high-applied magnetic field gradient, providing a large stress capability, and reasonably large strain. Therefore, it is adopted in the present design of the inchworm actuator. The hybrid mechanism is based on the stress-induced martensitic phase transformation produced by applied magnetic field gradient, thus enhancing the displacement, as the stiffness of shape memory alloy reduces due to the martensitic phase transformation. Despite the promising performance of Fe-Pd FSMA system by the hybrid mechanism, the price of Pd is very expensive. One of the alternative FSMA systems is a ferromagnetic shape memory alloy composite that consists of a ferromagnetic material and a superelastic grade shape memory alloy. The function of the former is to introduce a large magnetic force by the hybrid mechanism, while that of the latter is to sustain large stress and induce larger strain. We have designed and fabricated the inchworm actuator based on the FSMA composite and the hybrid mechanism. The inchworm actuator is made of two sets of electromagnet systems, FSMA composite membranes and clutch systems. The actuator can provide moderate output force and very large two-way displacement achieved by the inchworm mechanism which accumulates many small strokes. The inchworm mechanism is successfully demonstrated by the clutch system driven by the FSMA composite membrane. Our prototype inchworm actuator succesfully produces 30N force and 65mm/s stroke speed. It is noted that the stroke of this inchworm actuator based on FSMA composite can be easily increased from the current 500 mm as far as the center bar is increased and the inchworm motions are stably designed with clutch system.