Thin permalloy (Ni80Fe20) films of 7–20 nm thickness were grown on silicon (100) substrates within an ultra high vacuum (UHV) system. The films were subsequently characterized by scanning tunneling microscopy (STM) and scanning tunneling spectroscopy (STS). The STM images show a polycrystalline structure. The size of the randomly oriented crystallites was in the range of 5–25 nm. The STS data show on top of atomically flat terraces of the larger crystallites two distinct signatures. We attribute these signature to the presence of nickel and iron at the surface. The spectroscopy on top of the iron regions exhibits a distinct peak at an energy of 0.6 eV. The position of the peak shifts to 0.9 eV when moving the tip away from the iron position while it decays. © 2003 American Institute of Physics