Small cobalt particles embedded in a silver matrix have been prepared using the electrodeposition technique. The size of the clusters is controlled by the deposition potential and the Co growth time. Structural, magnetic and magneto-transport properties of Co–Ag samples have been investigated as a function of the Co concentration between 2 and 40 at% cobalt. Superparamagnetic behavior is evidenced for the low contents of cobalt while long-range magnetic order appears at higher Co concentrations. The particles size has been determined from magnetic properties and from the X-ray diffraction technique, and varies between 3.5 and 9 nm. Magnetoresistance passes through a maximum as a function of the cobalt concentration. A maximum of ~ 4% GMR is obtained at room temperature while GMR reaches a value of 14% at 10 K.