Magnetic, structural, and transport properties of as quenched and annealed Co10Cu90 samples have been investigated using x¿ray diffraction and a SQUID magnetometer. The largest value of MR change was observed for the as¿quenched sample annealed at 450°C for 30 min. The magnetic and transport properties closely correlate with the microstructure, mainly with Co magnetic particle size and its distribution. For thermal annealing the as quenched samples below 600°C, the Co particle diameters increase from 4.0 to 6.0 nm with a magnetoresistance (MR) drop from 33.0% to 5.0% at 10 K. Comparison with the theory indicates that the interfacial electron spin¿dependent scattering mechanism correlates with GMR for Co particle diameters up to about 6.0 nm.