The morphology, microstructure and the luminescent properties of CdS and CdTe films were studied. As-grown CdS films were polycrystalline with a grain size in the 200-600 Angstrom range. Significant grain growth and reduction in defect density were observed in these films after heat treatment. The CdTe films exhibited a high density of grain boundaries and structural defects within the grains. Both grain boundaries and intragrain defects are very active recombination sites. Heat treatment effected a marked grain growth and reduction in the recombination efficiency of the grain boundaries and intragrain defects.