The effect of nitrogen incorporation on the kinetics of L1 0 transformation in FePt alloy films was studied. Films with a maximum possible amount of nitrogen were prepared by sputtering a FePt compound target with pure nitrogen. As-prepared films consisting of nano-grains of Pt and Fe 0.7 N 0.3 transformed to face-centered cubic FePt phase with a certain amount of nitrogen incorporated in the grains after annealing at 573 K. It was found that the presence of N results in faster kinetics of L1 0 transformation compared with pure FePt alloy films, as well as a substantial reduction in grain size. Detailed structural and diffusion measurements were carried out to elucidate the mechanism of enhanced transformation kinetics as well as grain size reduction. The activation energy for volume diffusion of Fe in FePtN films was found to be 0.27 ± 0.14 eV, while that in FePt was 0.50 ± 0.17 eV. Faster atomic diffusion in nitrogen-contain-ing films was the cause of an enhanced rate of L1 0 transformation. Further studies reveal that, in partially transformed FePtN alloy films, N is incorporated mainly in the grain boundary region, which hinders grain growth and results in a smaller grain size.