The sputtered Bi-substituted iron garnet films of improved microstructures are successfully grown using the optimized multi-step rapid thermal annealing (MSRTA). The concepts of the incubation time and the relaxation time in the MSRTA are applied to obtain good microstructures of garnet films. By repeating the optimized thermal cycle many times, the high density of nucleated grains can be obtained, and the grain size can be forced to be as small as it can be. This optimized MSRTA leads to a finer grain size of less than 0.1 mum and better surface morphology with higher grain density than a conventional annealing method. The crystallized sample shows good squareness and large remnant Faraday rotation.