Nanocrystalline CdS was synthesized by sonochemical and microwave methods. Characterization of nano-CdS was carried out by optical absorption, X-ray diffraction, TEM, SEM and EDX. A hyperbolic band model was used to calculate a shift in energy over that of the band gap of bulk CdS. Colloidal films comprising of nanocrystalline CdS were fabricated by the dip coating method. A comparison of optical absorption of CdS films on indium tin oxide (ITO)/glass by sonochemical and microwave methods was made with solution grown CdS films on ITO/glass. A blue shift in energy level at the nanoscale is demonstrated by optical absorption, and X-ray diffraction of nano-CdS shows a cubic structure. Electron microscopy studies with an FE-SEM and TEM show a particle size of 15 nm and diffraction patterns show a crystalline nature. Overall reduction in optical absorption due to blue shift is expected to result in higher performance, especially in short-circuit currents in CdS/CdTe solar cells. (C) 2003 Elsevier B.V. All rights reserved.