Cobalt-carbon thin films proposed for use as granular magnetic media are generally prepared by codeposition sputtering. An alternative method is nanolamination of the component layers (media and matrix) followed by annealing. We have produced and characterized thin-film granular structures prepared from nanolaminate layers of Co and CN x . For the as-deposited samples, only metallic cobalt is observed with XPS and a constant nitrogen concentration of x~0.15 was measured for the carbon nitride layers. The annealed films have oxidized cobalt in the very near surface region. Atomic force microscopy measurements show that the surface of the film roughens significantly upon annealing, with the RMS roughness increasing from 0.2 to 1.0 nm. Thus, it appears that the nanostructural evolution caused by the annealing process, which gives rise to grain formation, also degrades the smooth surface of the CN x capping layer and exposes some of the cobalt to ambient. The potential implications of these observations on tribological performance are explored.