Cu–Co granular films have been prepared by galvanostatic dc electrodeposition in a single sulphate bath. The magnetoresistance ratio (MR5h(R 2R ) /R j3100) increased with increase in annealing temperature until 4508C, beyond which MR starts decreasing. Lower H 0 0 coercivity values along with non-saturating behaviour of the room temperature magnetization curves indicated the presence of an appreciable amount of superparamagnetic clusters. The average cluster size was calculated by fitting the superparamagnetic component of magnetization to Langevin equation. The average radius of the Co clusters (assuming spherical shape) was calculated to be 1.87 nm for an as-deposited film and 1.57 nm for a film annealed at 4008C for 1 h. The lowering of average cluster size with increase in annealing temperature in the metastable films is attributed to the segregation of many new (smaller) Co clusters.