Abstract The shapes and structures of cobalt islands on Ag/Ge (1 1 1) √3 × √3 surfaces were studied using a scanning tunnelling microscope and low-energy electron diffraction techniques. Cobalt islands with periodic structures on their flat top layers were found after annealing at 200–300 °C. This new structure of the islands shows reflection symmetry and the mirror planes are along [−2 1 1], [1 1 −2], and [1 −2 1] axes of the Ge (1 1 1) surface. Annealing treatments at temperatures above 200 °C cause the cobalt atoms nucleate to form larger and higher islands. As a consequence, the island densities decrease rapidly as the temperature increases. In addition, an obvious structural and shape transformation of the cobalt islands occurs at 400–500 °C. These changes include the hexagonal shapes of islands, compact arrangement of the surface atoms with hexagonal symmetry, and looser layer separations. These phenomena can be explained by various atomic processes at different temperatures and the interactions between cobalt and the germanium substrate through the silver layer.