Aluminum Nitride (AlN) is a wide band gap III-V semiconductor material often used for optical applications due to its transparency and high refractive index. We have produced and characterized AlN thin films by reactive r.f. magnetron sputtering in different Ar-N2 atmospheres in order to verify the best gaseous concentration to be utilized as anti-resonant layer in ARROW waveguides. The corresponding films were characterized by Fourier transform infrared spectroscopy (FTIR), Rutherford backscattering spectroscopy (RBS), Ellipsometry and visible optical absorption. The AlN properties did not varied significantly between the films deposited with 20 and 70 sccm of N 2, most of the variations occurred for films deposited with 18 sccm of N2 or below. The film deposited with 20 sccm was selected to be used as the first ARROW layer in the fabricated waveguides. Two routines were used to design the waveguides parameters, the transfer matrix method (TMM) and the semi-vectorial non-uniform finite difference method (NU-FDM). Attenuation as low as 3.5dB/cm was obtained for a 7 μm wide waveguide. © 2010 Copyright SPIE - The International Society for Optical Engineering.