High-resolution electron microscope observations confirm the presence of small crystallites in thin TbFeCo films protected by Si3N4 overcoats. Selected area electron diffraction patterns in top-view projection indicate that the crystals have a face-centered-cubic structure. Microscope analysis reveals grain growth following annealing of these protected thin films at 200°C in vacuum, and Kerr measurements yield large reductions in coercivity relative to the room-temperature value. The typical grain size visible in top-view observations increases from about 3 nm in the as-deposited samples to about 30 nm after annealing at 200°C for 36 h while the static coercivity, Hc, drops by about 40%. The fcc structure of the crystals is retained after annealing.