The influence of oxygen contamination of Co‐Cr thin films during evaporation was investigated by measuring their magnetic properties and recording characteristics. By increasing the amount of added oxygen, perpendicular anisotropy of Co‐Cr thin films was degraded, causing an increase of the coercive force Hc and squareness ratio Mr/Ms in the longitudinal direction. In recorded signal characteristics, the addition of oxygen results in a decrease of the dipulse ratio and a degradation of the recording density response through the enhancement of recording demagnetization. In noise characteristics, it results in reverse dc erase noise response with a peak at some reverse current which is characteristic of longitudinal thin‐film recording media, while the noise in the presence of signal does not show an increase with increasing recording density, which is quite different from the longitudinal thin films. Another distinctive result was that even a sample with a small amount of oxygen, where magnetic properties and recording density response were roughly the same as the samples without intentional addition of oxygen, showed a very huge dc erase noise.