The granular FePt–Ag thin films consisting of FePt particles dispersed in a Ag matrix were prepared by co-sputtering from FePt and Ag targets. The FePt particles in as-deposited film are soft magnetically disordered face-centered-cubic γ-FePt phase. The magnetic easy-direction of the as-deposited film is parallel to the film plane. The in-plane coercivities of the as-deposited films were below 700 Oe. The higher coercivity of the film will obtain after annealed treatment by transforming the γ-FePt phase into hard magnetically ordered face-centered-tetragonal (fct) γ 1-FePt phase. The in-plane coercivity of the annealed film was much larger than out-plane coercivity. The particle size of FePt in annealed film was increased with annealing temperature but decreased with increasing Ag content. The (FePt) 70–(Ag) 30 film with film thickness of 10 nm annealed at 600 °C for 15 min and ice–water quenched having an in-plane coercivity around 3.5 kOe. The M s value of this film is about 350 emu cm −3 and the squareness is about 0.8. The FePt particle size in this film was very uniform and the FePt particles were isolated by Ag.