Effect of in situ CdCl2 treatment on the morphological, structural and electrical properties of CdTe films as well as on solar cell characteristics of CdS/CdTe junction has been investigated. XRD measurements show that the presence of CdCl2 vapours induces < 111 > oriented growth in the CdTe films. CdCl2 concentration required for this oriented growth is found to be directly proportional to the substrate temperature. SEM measurements show enhanced grain growth in the presence of CdCl2. Spectral response of the CdCl2 treated CdS/CdTe solar cells shows an enhanced CdS diffusion in to the CdTe, which results in an improved spectral response in UV range and a consequent reduction in the interface states density. A drastic reduction in the deep levels due to the CdCl2 treatment, as seen in the photo-capacitance studies, has results in CdS/CdTe solar cells having efficiency >8%.