We have shown that the structural and magnetic properties of FePt thin films were affected strongly by capped SiO 2 layers prepared by ionbeam bombardment followed by post-annealing. Compared to the single fcc FePt phase in the as-deposited FePt/SiO 2 bilayer (0% O 2 /Ar), annealing at 550 C produced an ordered L1 0 FePt phase with enhanced coercivity ($14 kOe). Increasing the %O 2 /Ar during deposition of the top SiO 2 layer resulted in smaller ordered FePt grains separated by grain boundaries of SiO 2 . We find that the (001) diffraction peak is broadened considerably with larger SiO 2 deposition %O 2 /Ar and annealing, likely due to the induced strain. Our results indicate that FePt/ SiO 2 films deposited with lower %O 2 /Ar, the oxygen atoms created by the ion-beam bombardment act effectively to inhibit the FePt grain growth, whereas the excess oxygen atoms present during film deposition with higher %O 2 /Ar may induce a local strain on the FePt crystallites by occupying the interstitial sites in the FePt lattice.