The microstructure of filtered cathodic vacuum arc deposited tetrahedral amorphous carbon films is studied as a function of ion energy. An optimum energy window in the density and C–C sp3 content at an ion energy of ;90 eV observed in this study. It is shown that the density of the\ud amorphous carbon films are closely related to the sp3 content. The observation of nanocrystals embedded in the amorphous carbon matrix is reported. Most of the crystals observed by transmission electron microscopy can be indexed to graphite, but some of the crystals can be indexed to cubic diamond. The chemical composition of the crystals is analyzed using electron energy loss spectroscopy ~EELS!. The only discernible EELS edge is that of C at an energy of 285\ud eV
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