In situ high‐angle x‐ray diffraction (XRD) measurements during an annealing process and extensive low‐ and high‐angle XRD analysis before and after annealing have been performed to study the influence of annealing on the microstructure of a Ni81Fe19/Ag multilayer film. We concentrate on a detailed description and quantification of induced changes in microstructural properties and on changes in the crystalline structure of sublayers. The observed effects obtained from the high‐angle XRD, where superlattice structural refinement and standard powder diffraction methods were used, are utilized to model the changes from microscopic point of view. The low‐angle XRD reflectivity measurements were analyzed using a new distorted‐wave Born approximation approach which enables to get information about interlayer structure parameters such as interface roughnesses, degree of vertical correlation and lateral correlation length. The presented low‐angle and high‐angle analysis demonstrates general applicability of x‐ray diffraction for complex and quantitative in‐situ investigation of structural changes in metallic multilayers during annealing. An effect of lateral scaling for different types of roughness is discussed and a general approach is shown for the case of metallic multilayers. © 1996 American Institute of Physics.