The effect of annealing on the microstructure of cylindrical electrodeposited 81-percent Ni, 19-percent Fe films was studied with the electron microscope. The films were deposited onto 5-mil Be-Cu wires having either Au or Cu intermediate layers. The annealing was performed on both free-standing films and on films still attached to the substrate. The initial change in the free-standing films was a rapid recrystallization. After the whole film had recrystallized, normal grain growth was observed. There is evidence that the driving force for the annealing is provided by stresses present in the films. Films annealed while attached to a Au-Be-Cu substrate did not exhibit recrystallization or grain growth, and the electron microscope studies showed that the Ni-Fe grains were pinned by Be-Au which diffuses into the grain boundaries but does not alloy with the Ni-Fe. The films which were annealed while attached to a Cu-Be-Cu substrate behaved essentially like free-standing films. Electron beam microanalysis and electron diffraction studies revealed that Be-Cu diffuses into the Ni-Fe grain boundaries and then alloys with the Ni-Fe. Recrystallization of the alloy can then take place freely.