A method of cutting a rare-earth alloy with a wire 20, on which abrasive grains are fixed with a resin layer provided on the outer surface of a core wire, includes the steps of: providing a wire, of which the surface is coated with a lubricant including a glycol, by reeling the wire up in a pair of reel bobbins 40a and 40b; reeling the wire off one of the reel bobbins and letting the wire travel on a plurality of rollers 10a, 10b and 10c; and cutting the rare-earth alloy with the traveling wire while a portion of the rare-earth alloy being cut with the wire is supplied with a first coolant which is mainly composed of water. As a result, the life of a wire can be extended when a rare-earth alloy is cut with a wire saw machine using a coolant which is mainly composed of water.