The dynamic behavior of ferromagnetic cobalt granules in ion‐beam cosputtered Co22Ag78samples under annealing treatment was examined by transmission electron microscopy (TEM), using a real‐time video recording system. Cobalt granules about 10 nm in average size were embedded in a nonmagnetic silver matrix. It was observed that,insitu, the cobalt granules changed continually in shape and size with annealing temperature and time. We have estimated the changes of cobalt granule size from the results of TEM. The ferromagnetic resonance method was employed to study the evolution of the shapes of cobalt granules. It shows that cobalt granule shapes and sizes change mainly along the plane of the film during the process of annealing. ©1995 American Institute of Physics.