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The effect of residual stress and surface morphology of soft magnetic underlayers (SUL) on the magnetic properties and microstructure of CoCrPtO layers was investigated. Films of CoCrPtO(20 nm)/Ru(20 nm)/Ta(5 nm)/CoZrNb(200 nm) structure were used. Sputtering pressure for the SULs was varied from 1.5 mtorr to 40 mtorr to modify residual stress and surface morphology while the sputtering conditions were fixed. Residual stress was measured by a curvature method. Surface morphology was investigated by atomic force microscopy and transmission electron microscopy. Magnetic hysteresis loops of CoCrPtO layers were measured by a polar Kerr hysteresis loop tracer. Results indicate that the grain isolation are correlated with the surface topology of the SUL which may be associated with residual stress.