Rare-earth (RE) doped Co0.4Ag0.6 thin films (approximate to 40 nm) were deposited on glass substrates at room temperature by an rf-magnetron sputtering system. Go-sputtering was used to dope RE (Ce, Nd, Sm, Tb, Dy and Er) into the Ag region. The evolution of the magnetoresistance (MR) properties and the phase separation in this sputtered Co-Ag alloy system were investigated in relation to the annealing condition and the RE-doping. Experimental. results showed that the doping of either Ce, Tb or Sm enhanced the MR response of the Co-Ag films, while Nd depressed the response.