Auger Electron Spectroscopy in conjunction with ion sputtering technique has been used to measure the composition profile in Au/NiFe and NiFe/SiO2 films. Interfacial mixing was found to exist as a result of biased sputtering and its extent was affected by bias voltage and substrate materials. Changing the bias voltage from 0 to 60 volts in sputtering NiFe films of 600 Å thickness on SiO2 can reduce the resistivity by 40% and Hc by about 80% but increase the magneto‐resistive effect from 1% to 2.5%. Also as a result of mixing at the Au/NiFe interface, the magnetic moment has been observed to be diluted by about 80% in a 500 Å NiFe film deposited on a glass substrate at 0 to 60 volts. The degree of dilution was significantly reduced if deposition was made on a SiO2 substrate or at higher voltages. An intermediate layer of 100 Å SiO2 was found to be effective in eliminating the mixing between Au and NiFe.