In this investigation, cadmium telluride (CdTe) thin films are deposited by radio frequency (rf)-magnetron sputtering and analyzed structurally. Structural variations with processing parameters are assessed using x-ray diffraction and scanning electron microscopy. Results indicate that the microstructure and stress of the films are sensitive to the deposition conditions and CdCl2/annealing procedures. Films deposited at room temperature are columnar type, demonstrating a mixture of zinc blende (cubic) and wurtzite (hexagonal) phases. These films form with the preferential column axis along the cubic [111] direction. In contrast, films deposited at elevated substrate temperatures consist of a closely packed array of cubic-phase polycrystalline grains. The CdCl2/annealing treatment appears to reorganize CdTe microstructures from a columnar to a granular structure, and changes the preferred orientation. The treatment also appears to reduce the residual stress that accumulates during film formation and thereby improves the crystallinity of the grain. However, it is also observed that the CdCl2/annealing treatment tends to increase the extent of voids formed around grains.