Ternary based aluminium doped zirconium oxide (AlxZryOz) was grown on silicon (Si) substrate after post-sputter oxidation of the Al-Zr film at different temperatures (400-1000 degrees C). Mixed phases (monoclinic + tetragonal) of AlxZryOz films were formed in all of the investigated films, accompanied with generation of oxygen vacancies (V-o). The presence of V-o favoured the hopping of oxygen molecules for oxidation to take place, leading to the formation of Al-Zr-Si-O interfacial layer (IL). The saturation of lattice with oxygen at high temperature (800 and 1000 degrees C) encouraged the trapping of additional oxygen as interstitials at the Al-O network. Owing to the competition of both V-o and interstitials, microcracking was found on the film surface. Subsequent investigation was focused on the film obtained at 600 degrees C to study frequency dependent characteristics (dielectric constant, dielectric loss, interface state density, and series resistance) through capacitance-voltage and conductance-voltage measurements at different frequencies.