PolarizedCo Kedge extended x-ray absorption fine structure measurements obtained with electric vector parallel and perpendicular to the film plane indicate differences in Co bonding along these two directions in room-temperature evaporatedCo0.16Pd0.84alloy films. A local modulation of the Co fraction whose amplitudes are 0.05–0.09 exists along the growth direction in the alloy films. Pd underlayer and Pd spacer layers alternated with the alloy layer induce coherency strains resulting in an anisotropic effective strain state. Both anisotropic strain and local compositional modulation are likely to contribute to the perpendicular magnetic anisotropy observed in these alloys. ©1997 American Institute of Physics.