The influence of the heat treatment of CdS films on the microstructure of CdS and the performance of CdS/CdTe junctions was investigated. The annealing of chemically deposited CdS created the pores in CdS films. The performance of cells with CdS films annealed in 20% H-2 + N-2 was improved despite the formation of larger pores. These pores formed at CdTe deposition temperature. No noticeable change in the optical transmittance and X-ray diffraction (XRD) patterns was observed after CdS annealing. CdS annealing after CdCl2, treatment resulted in grain growth and the formation of large pores. Solar cells with CdS films annealed in 20% H-2 +N-2 showed the best performance due to the passivation of the interface states. (C) 2001 Elsevier Science B.V. All rights reserved.