The direct‐current (dc) joule heating technique was exploited to fabricate giant magnetoresistance (GMR) Co10Cu90granular alloys. The Co cluster precipitation process was investigated by calorimetric and x‐ray diffraction measurements. AtT=10 K, the largest MR change of 25.0% has been observed for the melt‐spun Co10Cu90ribbon annealed atI=5 A. The magnetoresistance scales approximately as the inverse Co particle size. At room temperature, it was found that the dc joule‐heated samples show relatively high GMR in comparison with furnace‐annealed samples. Based on the phenomenological GMR model, we assumed that it is a consequence of smaller Co particles formed in dc joule‐heated samples. ©1995 American Institute of Physics.