Structured nanocomposite films consisting of five Fe layers embedded in an amorphous Al2O3 matrix (Fe:Al2O3) have been grown by sequential pulsed laser deposition. The formation of well isolated quasispherical nanocrystals is observed for samples with Fe content per layer close to 6.5×1015 atoms/cm2. Increasing the Fe content leads first to the formation of elongated nanocrystals and then to quasicontinuous layers. The evolution in the shape and size of the nanocrystals is reflected in the magnetic behavior of these systems. A crossover from a low temperature ferromagnetic regime to a high temperature superparamagnetic regime is observed at a temperature of 23 K in the samples containing isolated quasi-spherical nanocrystals. In this case, a reduced moment per Fe atom (1.4 μB/atom) with respect to the value for α-Fe (2.2 μB/atom) is estimated. This behavior is attributed to the presence of a Fe-oxide surface shell on the nanocrystals. The large values of the estimated effective magnetic anisotropy (1.4×106 J/m3) and the low temperature coercivity in these samples are attributed to a strong surface contribution to anisotropy, whereas the temperature dependence of coercivity is attributed to thermal activation. © 2001 American Institute of Physics.