High-resolution electron microscopy has been applied to the study of the microstructure of TbFeCo alloys. Recently, we reported on the presence of microcrystals (2.5-7.5 nm) in sputter-deposited TbFeCo alloys,1 but their possible role in influencing the magnetic properties of these alloys is not yet clear. We have conducted further studies on structures consisting of SiN(8.0 nm)/TbFeCo(20 nm)/SiN(12.5 nm)/Si. Observations were made both in top view and cross section using standard techniques such as bright- and dark-field diffraction contrast imaging, as well as high resolution. We have confirmed the presence of nanocrystals in our plan-view observations. In addition, we conducted annealing experiments (ex situ) and recorded changes in magnetic properties such as coercivity. We find after about 36 h annealing time at 200°C that the crystals grow from ∼3 nm to about 20 nm. The H c change was measured to be -35%, but it is noted that most of the change occurred within the first 100 s (-25%). We will conduct further measurements to investigate whether the nanocrystallites are related in any way to the magnetic anisotropy of these alloys.