Co/AZO nanocomposite films were deposited by magnetron sputtering technique in alternating deposition (AD) method under different Co target currents. The influences of Co target current on the structure and optical properties of the films were studied. XRD and TEM results show that the crystallization of the as-grown films reduces with the increasing of Co target current, and no Co diffraction peaks are observed. Crystallization is significantly improved after annealing, while CoO nanoparticals are found in the annealed films under Co target current of 0.5 A as well as Co nanoparticals in 0.3 A films. UV-Vis results indicate that transmittance declines with the increase of Co target current, but notably increases after annealing. Three characteristic absorption peaks corresponding to the electronic transition of high spin states Co2+ (d7) also appear in the UV-Vis spectra, particularly in 0.2 A films