We fabricated In0.52Al0.48As:MnAs granular thin films by annealing [(In0.52Al0.48)(1-x)Mn-x]As alloy thin films at 600 degrees C. The [(In0.52Al0.48)(1-x)Mn-x]As thin films were grown on InP(0 0 1) substrates with Mn concentrations x of 0.09 and 0.12 by low-temperature molecular beam epitaxy. We investigated the structural and magneto-optical properties of the In0.52Al0.48As:MnAs granular thin films by X-ray diffraction and magnetic circular dichroism, and compared with those of the as-grown [(In0.52Al0.48)(1-x)Mn-x]As thin films. The In0.52Al0.48As:MnAs granular thin films showed a large magneto-optical effect at room temperature. This large magneto-optical effect of the granular materials lattice-matched InP will be useful for InP-based magneto-optical devices operating at room temperature. (c) 2007 Elsevier B.V. All rights reserved.