Epitaxial growth and magnetic properties of group‐IV ferromagnetic semiconductor Ge1–x Fex thin films were investigated by employing in‐situ reflection high‐energy electron diffraction (RHEED), transmission electron microscopy (TEM), and magnetic circular dichroism (MCD). When Ge1–x Fex films were grown at substrate temperatures (TS) of 100–200 °C, their RHEED pattern showed streaks with a 2×2 reconstruction pattern, indicating two‐dimensional growth mode with atomically flat surface morphology. Single‐phase crystallographic structure without Fe‐Ge intermetallic compounds was observed in the films by TEM. MCD measurements revealed that s,p‐d exchange interactions induced by the incorporation of Fe atoms that occupied the substitutional sites of the host Ge matrix cause single‐phase ferromagnetic ordering in the Ge1–x Fex films. Above TS = 300 °C, the growth mode was changed from two‐dimensional growth mode to three‐dimensional growth mode. It was found from MCD observations that when Ge1–x Fex films are grown at TS = 300–400 °C, phase separation occurs and the films contain ferromagnetic precipitates. A ferromagnetic semiconductor phase was obtained for TS ranging from 100 °C to 200 °C, and higher Curie temperature was obtained for TS = 200 °C. (© 2006 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)