The damp heat stability and subsequent vacuum annealing behavior of aluminum doped zinc oxide (AZO) films was investigated using Hall effect measurements, X-ray diffraction (XRD) and optical spectrometry techniques. The AZO films were deposited on glass or silicon wafers using reactive and non-reactive magnetron sputtering from metallic and ceramic targets, respectively. Additionally, we characterized surface textured AZO films, which are used as light scattering transparent conductive oxide (TCO) in silicon thin film solar cells. For all films a degradation of the electrical film properties was found after the damp heat treatment. For thick compact films, with large grain size, only a small increase in the electrical resistivity was observed, whereas less compact films prepared at high deposition pressures or very thin films (< 300 nm) showed an increase in resistivity by up to a factor of three already after 300 h. The conductivity degradation during damp heat treatment could be largely reversed by annealing in vacuum. However, annealing temperatures of at least 150 °C were required. Possible mechanisms explaining the experimental results are discussed. © 2005 Elsevier B.V. All rights reserved.