Diamond films are the optical choice for IR window applications. Polycrystalline diamond films were synthesized in this study by microwave-plasma-assisted chemical vapour deposition (PACVD) using CH4 + CO2 as reactive gases. The primary purpose of this study is to determine the effect of the deposition conditions on the optical properties of PACVD diamond films. Room temperature optical properties of free-standing diamond films were studied by Fourier transform IR spectroscopy. Experimental results indicate that the refractive index of diamond films is comparable with that of natural diamond. The scattering loss caused by the rough surface of as-grown diamond film was reduced using a two-step process and polishing techniques. The resulting reduction in scattering loss increased the transmission intensity. For low temperature deposited diamond film the intensity of absorption due to carbon-hydrogen stretch bands was higher than that for film deposited at a high temperature. IR spectra are fitted with simulated spectra to determine the background absorption caused by the amorphous carbon contained in the films. Additionally, the background absorption of low temperature deposited diamond film was found to be larger than that of a diamond film deposited at 850 degrees C.