Cluster-assembled SmCo alloy films were prepared by low energy cluster beam deposition. The structure, magnetic domain, magnetization, and magnetostriction of the films were characterized. It is shown that the as-prepared films are assembled in compact and uniformly distributed spherical cluster nanoparticles, most of which, after vacuum in situ annealing at 700 K, aggregated to form cluster islands. These cluster islands result in transformations from superparamagnetic states to magnetic single domain (MSD) states in the films. Such MSD structures contribute to the enhanced magnetostrictive behaviors with a saturation magnetostrictive coefficient of 160 × 10 in comparison to 105 × 10 for the as-prepared films. This work demonstrates candidate materials that could be applied in nano-electro-mechanical systems, low power information storage, and weak magnetic detecting devices.