The occurrence of discontinuous reactions under isothermal annealing of melt-spun Cu-10 at. % Co alloys, consisting of ribbons (20 A mu m thick) with columnar grains in the as-solidified state, has been investigated. The microstructure of the ribbons for different annealing temperatures (723-923 K) and annealing times (5-60 min) was determined by transmission electron microscopy, including analysis by energy-dispersive X-ray spectroscopy. Magnetic properties at room temperature were measured by means of hysteresis curve measurements in a vibrating sample magnetometer. Different types of microstructure were observed within grains and at grain boundaries. The spinodal decomposition microstructure was observed during the early stages of annealing for all annealing temperatures. Spherical precipitates grew from the modulated structure at a later stage, forming homogenous distributions throughout the grains. Heterogeneous distributions of incoherent precipitates formed at T > 873 K. As result of discontinuous precipitation, all grain boundaries exhibited arrays of rod-like Co precipitates with diameters and inter-rod spacing of few nanometers. The coarsening of discontinuous precipitates is attributed to a grain boundary-controlled phenomenon, called discontinuous coarsening (DC). The columnar morphology of the grains in the as-solidified alloy was connected with Co rods that were primarily oriented along the ribbon plane. This structure is connected with magnetic anisotropy, which is later weakened by DC. These results elucidate the unusual magnetic behavior of melt-spun Cu-Co alloys and provide a key to understanding their higher magnetoresistance in comparison with other heterogeneous systems.