We report the island growth morphology of 50-nm-thick FePt thin films prepared on MgO substrates by dc magnetron sputtering. In-depth high-resolution transmission electron microscopy studies showed that the island had a very flat facet in a dome shape and was composed of two distinct structures. The island contained FePt grains with an average size of 5-7 nm within about 10 nm from the film surface, whereas an ordered L1(0) phase was established below the island. The L1(0) structure was compressively strained along the film plane, generating {111} twins and stacking faults. The strained structure also affected the region where agglomeration between islands occurs. (C) 2002 American Institute of Physics.