The growth and microstructural evolution of Al/Ni and Ni/AI bilayer thin films have been investigated as a function of Al and Ni layer thickness and thermal treatment by transmission electron microscopy. Studies were also made of Al and Ni single layers of varying thickness. All films were grown by dc magnetron sputtering using carbon coated Cu TEM grids as substrates. For the bilayers, the Al thickness was fixed at either 3.5 or 7.0 nm while the Ni thickness was varied systematically from 3.2 to 12.8 nm. Deposition sequence significantly influenced bilayer microstructure even in as-deposited samples. Al/Ni bilayers generally exhibited a finer microstructure than Ni/AI. In the 3.5 nm Al/Ni bilayers no conclusive electron diffraction evidence was found for elemental Al while for the reverse sequence both Al and NiAl3 diffraction rings were found. In the 7.0 nm Al/Ni bilayers diffraction rings due to Al were observed. The reverse sequence again produced both Al and NiAl3 diffraction rings. Interestingly, diffraction rings due to the Ni layers were found for all samples but were consistently measured at positions corresponding to a 2.5–3.5% increase in interplanar spacing. Annealing at 385°C produced evidence for generalized grain growth and strong accentuation of the electron diffraction rings due to the NiAl3 phase. Again, deposition significantly influenced annealed bilayer microstructure. For the Al/Ni sequence annealing produced polycrystalline N1AI3 island-like structures, while for Ni/AI bilayers, annealing promoted the growth of small NiAl3 crystals uniformly distributed in the film.