CdS thin films were deposited by the chemical bath deposition technique. The effect of annealing in Vacuum and under argon atmosphere on the optical and electrical properties of CdS thin films was investigated. Optical transmission spectra showed a slight shift of the absorption edge towards the lower wavelengths and a decrease in the gap value. The resistivity decreased down to 10 Omega cm upon annealing of the films. The conduction mechanism was investigated in the temperature range 200-400 K. For temperatures higher than 300 K the conduction could be explained by the traps at the grain boundaries for grains partially depleted. For temperatures lower than 300 K the conduction could result from a hopping due to localized states.