It has been observed that the magnetic anisotropy direction of certain thin Permalloy films prepared by the thermal decomposition of nickel and iron carbonyls can be rotated through 90 deg at room temperature by fields less than 10 oe. The experimental conditions under which these films were prepared suggest that this phenomenon is due to the presence of carbon. The relaxation time for the rotation of the anisotropy axis was calculated from the time dependence of the induction and found to be 10 msec. A simple model has been developed which relates the anisotropy rotation to specific domain wall configurations and to the establishment of a “directional order” among interstitial carbon atoms.