Polycrystalline oxygenated cadmium telluride thin films, with oxygen contents ranging from 0 to 15 at %, were grown by the reactive radio frequency sputtering technique. The structure of samples was studied using X-ray diffraction. The energy band gaps of the samples were obtained from optical absorption measurements. It was found that the cubic crystalline structure of as-deposited samples changes to the crystalline hexagonal CdTe phase and then to an amorphous CdTe:O structure as the oxygen content was increased from 0 to 15 at %. Evidence of this phase transition was obtained from X-ray diffraction and optical absorption measurements. For the films with low oxygen content an increase in the interplanar distances was observed, yielding to a reduction of the band gap of the material. Samples containing hexagonal CdTe nanocrystals show larger energy band gaps, as compared with those having the cubic CdTe phase. Copyright © 1996 Published by Elsevier Science Ltd.