The effect of Al2O3 content on the structure, electrical properties, magnetic properties, and interparticle exchange interactions of (Fe65CO35)(1 - x)(Al2O3)(x) films with Al2O3 volume fractions x ranging from 0 to 0.50 was systematically investigated. Among the films with x between 0 and 0.25, the lowest coercivity of 0.56 kA/m was achieved in the (Fe65Co35)(0.82)(Al2O3)(0.18) film. This is ascribed to the strongest exchange interactions between the Fe65Co35 nanoparticles in this film. Combined with the microstructure analysis of the (Fe65Co35)(1 - x)(Al2O3)(x) films, the modified Herzer's model was extended to interpret the variation of the coercivity with x and analyze the effect of the exchange interactions between the Fe65Co35 nanoparticles on the magnetic softness. The remanence curves confirm the existence of the exchange interactions and reveal the evolution of the exchange interaction strength with Al2O3 content. (C) 2012 Elsevier B.V. All rights reserved.