The giant magnetoresistance (GMR) and microstructure of FeCo-Al 2 O 3 films sputtered at various substrate temperatures (T s ) were investigated. The results indicate that the GMR of as-sputtered FeCo(41 vol.%)-Al 2 O 3 granular films reaches the peak value of 6.9%, while for FeCo-Al 2 O 3 granular films sputtered at 473 K, the dependence of GMR on volume fraction (f v ) displays 6% peak value with lower content about 35 vol.% FeCo. Based on the features of GMR of FeCo-Al 2 O 3 granular films sputtered at different f v and T s , an optimum factor A(D c /L c ) is introduced to explain qualitatively the influence of spin-dependent interface scattering(D) and tunneling barrier's thickness(L) related to f v and Ts on GMR. The phase separation of hcp α-Co from bcc α-Fe (Co) was revealed by analytical electron microscopy and its effect on GMR for different f v and T s was discussed. 1 Introduction Since the discovery of the giant magnetoresistance (GMR) in granular films [1,2], this phenomenon has been extensively studied due to its potential application in information industry. The GMR effect originates from spin-dependent scattering of conducting electrons at the interfaces between the ferromagnetic granules and the non-magnetic matrix, and within the ferromagnetic granules. Therefore, the GMR effect occurred easily in a system of ferromagnetic granule -non-ferromagnetic metal matrix in which the electronic mean free path and spin diffusion length are relatively long. In other words, the GMR cannot appear particularly in a material with high electrical resistivity. However, a pronounced GMR can be observed in some insulating granular films [3][4][5] and is believed to be based on the mechanism of spin-dependent tunnelling, therefore, the giant magnetoresistance in this case can be also called tunnelling magnetoresistance (TMR). The GMR has a closely relationship with chemical composition [6], measuring temperature [7], annealing conditions [8] or the substrate temperature. In this paper, we will investigate the effect of the composition and substrate temperature accompanying with microstructure on the GMR in FeCo-Al 2 O 3 granular films.