Aluminum nitride (AIN) films have been deposited by reactive r.f. magnetron sputtering in the mixed gas of argon, nitrogen and hydrogen. For the application of the surface acoustic wave device, it is essential to control the preferred orientation and the texture morphology of the films with deposition parameters. The changes of the preferred orientation and microstructures with hydrogen concentration are very interesting and have been investigated using X-ray diffraction, scanning electron microscopy and transmission electron microscopy (TEM). An AIN him with a (002) preferred orientation is deposited at the deposition conditions (an r.f. power of 200 W, a sputtering pressure of 0.7 Pa (5 mTorr), and a nitrogen concentration of 25%) and the preferred orientation changes abruptly to the mixed (100) and (110) preferred orientation as the hydrogen gas is added. As the hydrogen concentration increases, the deposition rate decreases rapidly and it is originated from the prohibition of synthesis reaction on the film surface. In addition, the shape of the grains on the film surface changes from conical to needle-shaped with the addition of hydrogen gas. From the analysis of high-resolution TEM, it is confirmed that the short axis of the needle-shaped grain is the c axis of the AIN film. The needle-shaped grain may be due to the faster growth rate in the a-axis orientation than that in the c axis. It can be concluded that atomic hydrogen may prohibit the film growth to the c-axis direction rather than to the a axis. In addition, the growth in the c-axis direction has proceeded by a ledge mechanism. Voids and secondary grain growth have been also observed in the needle-shaped grain.