Nanocluster beam technology combined with conventional sputtering was used to fabricate FePt-SiO2 nanocomposite films in this present work. The post-deposition annealing affected the final particle size and size distribution of FePt nanoclusters. The effects of both volume fraction of SiO2 matrix and annealing temperature on magnetic and microstructural properties were studied. Partial ordering, grain growth and agglomeration of FePt particles in FePt-SiO2 nanocomposite films occurred during annealing. A higher volume fraction of SiO2 matrix was effective in suppressing diffusion of atoms and magnetic exchange coupling of FePt grains. Excessive SiO2 however resulted in a lower degree of FePt ordering and thus lower coercivity. (c) 2005 Elsevier B.V. All rights reserved.