Al-Co/AlN-Co multilayer films with different layer thicknesses were prepared by using a two-facing target type D.C sputtering (TFTS) system. The deposited films were annealed isothermally at different temperatures and their microstructure, magnetic properties and resistivity were investigated. The magnetization of as-deposited films is very small irrespective of layer thickness. It was found that annealing conditions and layer thickness ratio (LTR) of Al-Co to AlN-Co can control the microstructure as well as the physical properties of the prepared films. The resistivity and magnetization increase and the coercivity decreases with decreasing LTR. High resistivity and sufficient magnetization were obtained for the films with LTR = 0.35. Films having such considerable magnetization and resistivity will be a potential candidate to be used for a high density recording material.