A series of Co35(SiO2)65 (volume fraction) nano-granular films of heat treatment at different annealing temperatures (Ta) were fabricated using ion-beam sputtering technique. The giant magnetoresistance of the samples was found to decrease with increasing annealing temperature. It was found that with increasing annealing temperature to 500K, the magnetic domains of Co35(SiO2)65 nano-granular films were more and more clear, which showed that with increasing annealing temperature, the neighboring isolated Co particles tended to arrange their magnetic moments parallel to each other, thus led to the decrease of the giant magnetoresistance of Co35(SiO2)65 nano-granular films with increasing annealing temperature.