Activated reactive evaporation (ARE) is a useful technique for the deposition of compound semiconductor films at low temperatures. High quality transparent and conducting oxides and hard coatings of transition metal compounds have been successfully deposited using this technique. However, owing largely to the complexity introduced by plasma, the microscopic deposition mechanism of the process is not yet fully understood. Based upon experimental data of cadmium oxide films deposited by ARE, it is proposed in this paper that the reaction forming CdO is heterogeneous. It is also found that the microscopic deposition process and thereby the structural and electrical properties of CdO films are primarily influenced by the chamber pressure and the substrate temperature. The oxygen percentage in the chamber is found to have comparatively less influence on film properties. The data demonstrate that film resistivities as low as 2 x 10(-4) OMEGA cm with about 85% transparency can be obtained using this technique.