Nanostructured CoFe thin¯lms were prepared on the glass substrates by spray pyrolysis deposition (SPD) method. The as-deposited¯lms were separately annealed at 500 C in ambient air and hydrogen atmospheres to investigate the e®ect of annealing atmosphere on di®erent properties of the deposited¯lms. Structural, morphological, magnetic and electrical properties of annealed thin lms were investigated by the X-ray di®ractometer (XRD), scanning electron microscope (SEM), vibrating sample magnetometer (VSM) and four-point probe measurements, respectively. XRD patterns show that by changing the annealing atmosphere from ambient air to hydrogen, the crystal structure transformed from cubic spinel phase (Fd-3m) to cubic CsCl-type phase (Pm-3m). SEM images demonstrated that the morphology, grain size and thickness of annealed thin¯lms depend greatly on the atmosphere type. Thickness of the¯lms annealed in ambient air and hydrogen atmosphere were 378 and 356 nm, respectively. The morphology of the¯lms changes from small sized granular for the ambient air-annealed¯lms to coral-like structures for the hydrogen atmosphere annealed¯lms. The magnetic properties of the annealed thin¯lms depend on the annealing atmosphere, the applied¯eld directions and¯lm microstructural properties. Hydrogen annealing induced a perpendicular magnetic anisotropy in CoFe thin¯lms. Room temperature hysteresis measurements show soft magnetic behavior of the hydrogen atmosphere annealed CoFe¯lms in the perpendicular direction suggested its application in perpendicular magnetic recording media.