The development of perpendicular anisotropy in amorphous GdCo based alloys is still not clearly understood, since no single model has been able to explain all of the various experimental results. This paper presents evidence that links the perpendicular magnetic anisotropy (Ku) in sputtered films with phase separation on a 25A˚ to 35A˚ scale as a function of bias. High resolution electron microscopy, large and small angle scattering by electrons, and Lorentz microscopy were combined in this study. Analogous to annealing E‐beam evaporated pure GdCo in UHV [Herd, J. Appl. Phys. 49, (1978) 1744], the void network is seen to disappear at −50V bias. With a drop of the compensation point below room temperature, large perpendicular domains are observed at −100V bias, comparable to the development of Ku after the glass transition in evaporated and annealed films. Further increases of bias to −200V led to a decrease in strip width to 0.25&mgr;. Application of bias in sputter deposition is seen to cause a continuous shift towards Co richer compositions, and simultaneously to effect annealing at increasing temperatures during deposition. Anisotropically shaped Co‐rich clusters are thought to be the source of perpendicular anisotropy in GdCo based alloys in general. Some recent results on peak shape in diffraction patterns and argon incorporation into sputtered films are discussed.