In this study, the optical properties and dc resistivity of a series of FeSiAl(N) films reactively sputtered with different partial pressures of N were investigated. Spectroscopic ellipsometry was used to measure the real and imaginary parts of the complex dielectric functions. There is a distinct micro/nanostructural transition from single-phase columnar body-centered-cubic (bcc) grains for partial pressure (pp) of nitrogen in sputtering gas ⩽4% to a two-phase nanocomposite of equiaxed bcc nanograins in an amorphous matrix for filmsdeposited with ⩾5% pp N. To assess the effect of surface oxidation on the optical properties, optical measurements were repeated on the 2 and 5% pp N films (representative of the two different types of films with different structures) after they were sputter etched in situ while performing depth profiling of the chemical composition using x-ray photoelectron spectroscopy. The low-nitrogen films(⩽4% pp N) showed a dielectric function typical of a metal whose charge carrier contribution can be described by a classical free electron Drude model. The nanostructured films(⩾5% pp N) showed a positive real part of the dielectric functionε1and no evidence of free-carrier plasmon excitation. The optical conductivity decreased and the dc resistivity increased by about a factor of 2.5 as the film structure changed from a single phase columnar structure to the two-phase material that consisted of nanograins in an amorphous matrix. In this study, the optical properties and dc resistivity of a series of FeSiAl͑N͒ films reactively sputtered with different partial pressures of N were investigated. Spectroscopic ellipsometry was used to measure the real and imaginary parts of the complex dielectric functions. There is a distinct micro/nanostructural transition from single-phase columnar body-centered-cubic ͑bcc͒ grains for partial pressure ͑pp͒ of nitrogen in sputtering gas р4% to a two-phase nanocomposite of equiaxed bcc nanograins in an amorphous matrix for films deposited with у5% pp N. To assess the effect of surface oxidation on the optical properties, optical measurements were repeated on the 2 and 5% pp N films ͑representative of the two different types of films with different structures͒ after they were sputter etched in situ while performing depth profiling of the chemical composition using x-ray photoelectron spectroscopy. The low-nitrogen films ͑р4% pp N͒ showed a dielectric function typical of a metal whose charge carrier contribution can be described by a classical free electron Drude model. The nanostructured films ͑у5% pp N͒ showed a positive real part of the dielectric function 1 and no evidence of free-carrier plasmon excitation. The optical conductivity decreased and the dc resistivity increased by about a factor of 2.5 as the film structure changed from a single phase columnar structure to the two-phase material that consisted of nanograins in an amorphous matrix.