A correlation between magnetoresistance and magnetic properties of as-deposited and annealed Cu/Co multilayers, produced by magnetron sputtering, has been discussed. Two models have been proposed to describe the shapes of magnetoresistance and magnetization hysteresis loops: one taking into account the multidomain structure of the layers and another based on dissimilar magnetic properties of the Fe buffer layer and Co layers. A difference between the initial magnetoresistance and the hysteresis peak as a function of the annealing temperature has been explained in terms of magnetization processes. The annealing treatments of the films with 2.2-nm Cu spacer at temperatures between 300 and 340 degreesC increased the magnetoresistance hysteresis peak to 43% compared to 30-35% for the as-deposited samples. This value remained high even after l-h annealing at 380 degreesC and the GMR at room temperature decreased only by 27% compared to the low temperature one.