For more than half of a century, morphotropic phase boundary (MPB) in ferroelectric materials has drawn constant interest because it can significantly enhance the piezoelectric properties. However, MPB has been studied merely in ferroelectric systems, not in another large class of ferroic systems, the ferromagnets. In this Letter, we report the existence of an MPB in a ferromagnetic system TbCo2-DyCo2. Such a magnetic MPB involves a first-order magnetoelastic transition, at which both magnetization direction and crystal structure change simultaneously. The MPB composition demonstrates a 3-6 times larger "figure of merit" of magnetostrictive response compared with that of the off-MPB compositions. The finding of MPB in ferromagnets may help to discover novel high-performance magnetostrictive and even magnetoelectric materials.