Metal-insulator granular film is technologically important for microwave applications. It has been challenging to obtain simultaneous high electrical resistivity and large saturation magnetization due to the balance of insulating non-magnetic and metallic magnetic components. FeAlO granular films satisfying both requirements have been prepared by pulsed laser deposition. The as-deposited film exhibits a high resistivity of 3700 μΩ∙cm with a negative temperature coefficient despite that Fe content (0.77) exceeds the percolation threshold. This originates from its unique microstructure containing amorphous Fe nanoparticles embedded in Al2O3 network. By optimizing the annealing conditions, superior electromagnetic properties with enhanced saturation magnetization (>1.05 T), high resistivity (>1200 μΩ∙cm) and broadened Δf (>3.0 GHz) are obtained. Phase separation with Al2O3 aggregating as inclusions in crystallized Fe(Al) matrix is observed after annealing at 673 K, resulting in a metallic-like resistivity. We provide a feasible way to achieve both high resistivity and large saturation magnetization for the FeAlO films with dominating metallic component and show that the microstructure can be tuned for desirable performance.