A simple and fundamental model of stress-induced demagnetization, which has scarcely been analyzed theoretically, is presented. Stress-induced demagnetization in a magnetic recording medium results from the magnetization reversal of individual magnetic particles dispersed in the magnetic layer. The magnetoelastic energy due to the application of three-dimensional stresses and the magnetostatic energy due to the demagnetizing field must be taken into account for an investigation of the magnetization reversal of each particle. It is found that the magnetization reversal can take place even during small stresses if a sufficient demagnetizing field exists. The sign of the magnetostrictive coefficient λ100has a significant relation to the susceptibility of magnetization reversal.