The effects of in situ annealing on the structural, optical, and electrical properties of Al-doped ZnO (AZO) films were investigated systematically. The the AZO thin films were deposited by radio frequency magnetron sputtering and then, annealed in situ at various annealing temperatures in the same vacuum chamber. It was seen that the resistivity of the films decreased significantly as the annealing temperature was steadily increased. This decrease was due to the alternate evolution in the carrier concentration and mobility because of the generation of oxygen vacancies in the films and an increase in their crystallinity. Using X-ray photoelectron spectroscopy, it was found that annealing at a critical temperature (600 A degrees C) promoted the formation of Zn-O bonds and annealing at a higher temperature (800 A degrees C) generated oxygen vacancies, resulting in an improvement in the mobility of the films, owing to an increase in their crystallinity, and an increase in their carrier concentration, respectively. Thus, the in situ annealing temperature is an important factor in determining the nature of bonding in AZO thin films, and in situ annealing is a useful method for obtaining films with better electrical characteristics.