We present our investigations on the enhancement of magneto-optical (MO) effects in nanocomposite Au–Co thin films. All the samples in this study were obtained by cosputter deposition varying the relative Au:Co composition and the growth temperature. A strong enhancement of the transverse MO activity is observed when surface plasmons are excited in the Kretschmann configuration. The correlation between the nanocomposite films' microstructure, morphology, composition, and their optical response under surface plasmon resonance excitation and their MO enhancement is discussed.