Co-Cr alloy thin films are considered to be an applicable perpendicular magnetic recording medium. The existence of nitrogen residual gas during sputtering has significant effects on the structure and properties of Co-Cr films. With the increasing of N-2, a phase transformation from hcp to fee structure happens gradually when the partial pressure of N-2 (P-N2) is in the range of 9.6 x 10(-3)-4.0 x 10(-2) Pa, and a transition from tensile to compressive stress takes place. The further increasing of P-N2 stabilizes the fee phase. Finally, when P-N2 is greater than 0.23 Pa, a nitride appears with a possible form of (Co1-xCrx)(2)N (where 0 < x < 1). The existence of N-2 degrades the preferred orientation of crystallines of hcp phase and has detrimental effects on the perpendicular magnetic properties. according to the experimental results, a mechanism for the effect of N-2 is proposed. The existence of N-2 lowers the surface mobility of deposited atoms, and causes the lattice distortion of grains. The transformation from hcp to fee phase is the result of the nucleation and expansion of stacking faults. A metastable phase with bet (body-centered tetragonal) structure may exist during the formation of fee phase because of the existence of lattice distortion. With the increasing of film thickness, the metastable phase transforms gradually to the stable fee phase.