We have studied the microstructure and surface morphology in annealed and nonannealed (001) epitaxial Ni films deposited on MgO single crystalline substrates. The correlation between microstructure and the magnetic anisotropy properties of the films such as the magnetization reversal has been determined. Scanning tunneling microscopy images of the surface of the annealed films indicate self-assembled periodic stripe nano-patterning, while images of the nonannealed films show typical mounded surfaces. The azimuthal dependence of the coercive field in the nonannealed films exhibits fourfold symmetry as expected from the symmetry of the crystal. The annealed films exhibit an additional uniaxial symmetry superimposed to the fourfold symmetry. Additional structural studies to understand the origin of the surface nano-patterning observed on (001) Ni films will also be presented. (C) 2003 American Vacuum Society.