The maximum room-temperature giant magnetoresistance (GMR) of electrodeposited Co-Cu/Cu multilayers produced during this work was approximately 9% at 8 kOe, and it was found to decrease with increasing bilayer repeat number. A transmission electron microscopy study has revealed the fine details of the microstructure formed during growth. At the beginning of the deposition very small, nano-sized crystallites formed with both hexagonal close-packed (hcp) and face-centred cubic (fcc) crystal structures containing a high level of internal stress. The Cu-content of these small crystallites was found to depend strongly on their crystal structure (fcc or hcp). After this initial polycrystalline region, the size of crystallites increases, forming an fcc superlattice with increasing average Cu concentration at the first hundreds of repeat periods. This increase is not monotonous across the whole sample thickness. As another effect, the bending of layer planes becomes more remarkable as the growth progresses. The above inhomogeneities formed during the deposition of hundreds of bilayers could be responsible for the decrease in GMR with increasing total thickness of the multilayered samples.