The main method of a granular metal-dielectric composite preparation is a deposition from the vapor phase; so, the structure of such a composites hardly can be equilibrium. Thermal annealing of as-prepared composites should bring some changes into the structure and make it more defectless. Therefore, influence of the annealing on magnetoresistance and electrical resistivity (r) of granular composites (Co41Fe39B20)(SiOn) has been investigated. Nanosized granular composites (Co41Fe39B20)x(SiO2)100-x, are obtained as a thin films (~5 mm) by ion-beam sputtering of composite targets. The samples with wide concentration range (36 £ õ £ 60 in at.%) have been prepared for investigation. According to the TEM data size of the metal granules, randomly distributed in the dielectric matrix, was 2-7 nm depending on the metal concentration. In all samples with non-percolated granular structure, negative giant magnetoresistance (GMR) was observed. The GMR reaches maximum value (2.6 %) in the (Co41Fe39B20)49(SiO2)51 composite in applied magnetic field of 11 êOe. This composite is close to the percolating threshold where metal conductivity substituted for thermoactivated conductivity mechanism. The samples were sequentially annealed in vacuum at different temperatures (300, 400, 500, 600 0Ñ) during short time. The diffusion processes take place in the composites during a heat treatment and depending on the concentration they leads to different consequences. Magnetoresistance as well as electrical resistivity increases after annealing at 300, 400 and 500 0Ñ in the composites, which are before the percolating threshold. The annealing of the composites, which are behind the threshold, leads to decrease of the r values and reducing of the GMR to zero. The observed increasing of r and GMR is mainly due to changes occurring in the dielectric matrix (reducing of the number of structure defects). Decrease of r values and vanishing of the GMR behind the threshold is caused by forming of a large conducting clusters. As a result of the thermal annealing the peak of GMR values was displaced to region with the larger contents of the dielectric. The displacement magnitude rises with annealing temperature. In general, thermal annealing of the composites allows increasing the GMR values (in our case the initial maximum value of 2.6 % grew up to 3.8 %). After annealing at 600 0Ñ the granular structure begins to be destroyed. The interaction between metal and dielectric phases takes place. Therefore, the GMR does not observed in the samples after annealing at 600 0C because the structure in this case became a homogeneous. The exception (large GMR after annealing at 600 0C) was found for sample with largest dielectric concentration. This happened because the smallest granules are more stable than the bigger one and higher temperature is needed to their destroying. The work was partly supported by the Russian Foundation for Basic Research (Grant N 02-02-16102).