Nanocomposite films of Ni80Fe20/NixFe1-xO were prepared by a dual ion-beam deposition technique. The structural and magnetic properties of nanocomposite films fabricated with oxygen content in the deposition assist beam ranging from 0% to 55% were studied. The dependence of the resistivity on oxygen percent shows that the compositions with exchange-enhanced coercivity are close to a percolation threshold. A strong temperature dependence of coercivity Hc and exchange bias field Hex is found in these composite films. Films prepared with 46% O2 in the assist beam exhibit an enhanced Hc relative to Permalloy (Ni80Fe20) and a characteristic shifted hysteresis loop indicative of exchange coupling between the constituent metal and oxide phases. At T=10 K, films prepared with 44% O2 in the assist beam have an exchange shift Hex∼-225 Oe with a blocking temperature TB∼100 K that reflects the low Néel temperatures of FeO-rich NixFe1-xO solid solutions. © 2003 American Institute of Physics.