High rate plasma-enhanced chemical vapor deposited (PECVD) silicon dioxide films are attractive for multichip module (MCM) applications, but the incorporation of various hydrogen-related impurities in these films and the resulting stress instabilities make their properties less than desirable. Annealing of such films was performed in different ambients at temperatures significantly below the oxide densification temperature. The changes in the bonding nature and stress of these films, as a result of annealing, and during aging were studied. A considerable shift in the Si-O characteristic peaks and a decrease in the full width at half maxima (FWHM) of the Si-O stretching peak were observed for films annealed in nitrogen or a steam-nitrogen ambient at atmospheric pressure. During subsequent aging these films showed negligible change in these parameters indicating their stability. Whereas, the films which were annealed in the chamber following deposition without breaking vacuum did not exhibit any appreciable change in Si-O peak position and FWHM during annealing but a very large change in these parameters during subsequent aging indicating their worst stability. Similar results were obtained from a stress stability study on these films. The results of this study suggest that moisture, which diffuses into the film during aging and/or annealing reacts with strained Si-O bonds and forms silanol (Si-OH). During annealing, the silanol reacts to reconstruct Si-O bonds and releases water as a by-product, thus the reason for the improvement in film quality is that the strain of the newly-formed Si-O bonds is much less than the strain of the original Si-O bonds.