The effects of annealing temperature on TbFe films prepared by dc magnetron sputtering were discussed. X-ray diffraction pattes indicate that these polycrystalline films consisting mainly of α-Fe and TbFe2 lave phase with grain sizes less than 25 nm can be obtained by a rapid cycle annealing process. Grain sizes can be controlled by varying annealing temperatures. Film hysteresis loop studies show that annealing treatment can improve TbFe film in-plane soft magnetic performances.