We have used EXAFS to investigate the local atomic structure and its change with annealing for amorphous, sputtered Tb20Fe80 alloy films. The structural and magnetic properties of these materials are of particular current interest because of applications for magneto-optic storage which require well controlled magnetic anisotropy. The major result from the Tb LIII and Fe K EXAFS measurements on Tb20Fe80 alloy films is that the distribution of TbFe nearest neighbor distances is significantly broader than the distribution of FeFe nearest neighbor distances. Annealing at 200C for 20h, which reduces magnetic anisotropy by about 50%, slightly alters both Tb and Fe environments. Annealing at 400C for 2h causes much more drastic structural changes: precipitation of crystalline, bcc Fe; major change of the near neighbor environment of Tb; and increase of the Tb LIII edge energy by about 1 eV. © 1988.