A theory of giant magnetoresistance in granular alloys was developed by con
sidering the spin-dependent scattering within the magnetic granules and at
their boundaries and the continuous distributions of granule sizes and dire
ctions of magnetization. The CPP formalism was recovered in the limit when
the effective conductivities in the granules are much larger than the matri
x conductivity. When this condition is not satisfied, the transport propert
ies of the granular alloys derive from the crossover of the parallel and pe
rpendicular current configurations. [S0163-1829(99)10309-6].