The soft magnetic properties of CoFe prompted an investigation of magnetoresistance in Co‐Fe‐Ag alloys. A series of (FeCo)xAg1-x (10≪x≪30) films were prepared by dc magnetron sputtering, followed by annealing in H2 at a variety of temperatures TA≤400 °C. The samples exhibit giant magnetoresistance (GMR) ratios which exceed 25% at a temperature of T=10 K, and 17% at T=300 K. The results of magnetization and x‐ray scattering experiments indicate that FeCo alloy particles precipitate from the Ag matrix upon annealing. We note in particular that the full width at half maximum (FWHM) of the MR curves (approximately 2 kOe) is significantly less than that of Fe‐Ag or Co‐Ag sputtered films having comparable GMR ratios. We compare the sharp MR response of the (FeCo)xAg1-x system to that of heterogeneous (Ni80Fe20)xAg1-x films.