Method for reducing the diameter of an end portion on a cylindrical end side portion of a hollow bar, said hollow bar having on its other end side portion a rack formed with an end rack tool at both ends. In said bar, a depression is also provided between each end rack tooth and a corresponding adjoining portion of said end side portion having an inclined portion opposing the tooth side face of the corresponding end rack tooth and continuous to each of the both ends of the rack. First, the one end side portion is nipped by means of a jig including a jig member having a pair of convex portionswhich are to be fitted inside said depressions to position the bar, and a jig member which is to be clamped/opened with respect to the jig member; After that, a compression die having an inside diameter smaller than the diameter of the outer periphery is pressed onto the outer periphery of the end portion of the cylindrical end side portion projected from the jig up to a press-in depth M determined preliminarily based on the rack, so as to reduce the diameter of the end portion.