The microstructure and magnetic property relationship in L1(0) ordered FePt-Al-O and FePt-Ag granular thin films have been studied. As-sputtered FePt-Al-O films, composed of isolated fine spherical FePt particles of similar to2 nm diameter with a disordered face-centered-cubic (fcc) structure, exhibit superparamagnetism. Annealing above 650 degreesC induces a transformation from a disordered fcc structure to ordered L1(0) phase and the films become magnetically hard. The microstructures of these films change greatly depending on the film compositions and annealing conditions, which are correlated with the magnetic properties. It was found that FePt particles smaller than 5 nm do not order at 500 degreesC, while the continuous FePt film orders perfectly at the same temperature, suggesting that the ordering temperature, T-c, decreases significantly when the particle size becomes less than 5 nm. In the FePt-Ag granular thin film, when the Ag composition is around 50 at. %, high coercivity (similar to 10 kOe) and fine uniform microstructure are obtained by annealing the films at 550 degreesC for 1 h. The changes in the magnetic properties of these granular films are discussed based on microstructural observation results. (C) 2001 American Institute of Physics.