By annealing at 460 degreesC for 120 s followed by 600 degreesC 120 s, nanocrystalline CoSi2 thin film with an average grain size of 5 nm can be directly formed from a Co/SiOx/Si multilayer with the SiOx, as a mediated layer. It is found that annealing at 460 degreesC for enough time is crucial for generating enough diffusion channels within the SiOx, layer. After these channels are created, subsequent annealing at 600 degreesC keeps these channels open and is responsible for rapid grain growth. In other words, by using two-step annealing, nucleation and growth processes can be effectively controlled and, hence, the resulting microstructure. The homogeneous nanograin-size distribution is important for ultralarge-scale integration technology below 90 nm to prevent resistance degradation induced by CoSi2, agglomeration. (C) 2004 American Vacuum Society.