Granular films composed of well defined nanometric Co particles embedded in an insulating ZrO2 matrix were prepared by pulsed laser depositon in a wide range of Co volume concentrations 0.15 x 0.43. High-resolution transmission electron microscopy TEM showed very sharp interfaces between the crystalline particles and the amorphous matrix. Narrow particle size distributions were determined from TEM and by fitting the low-field magnetic susceptibility and isothermal magnetization in the paramagnetic regime to a distribution of Langevin functions. The magnetic particle size varies little for Co volume concentrations x 0.32 and increases as the percolation limit is approached. The tunneling magnetoresistance TMR was successfully reproduced using the Inoue-Maekawa model. The maximum value of TMR was temperatureindependent within 50–300 K, and largely increased at low T, suggesting the occurrence of higher-order tunneling processes. Consequently, the tunneling conductance and TMR in clean granular metals are dominated by the Coulomb gap and the inherent particle size distribution.