In the last decade, metal oxide layers deposited on polymer substrates have been utilised as gas barrier films in food packaging as an alternative to the traditional aluminium foil. The resistance of these composite films to gas transmission is controlled predominantly by nano-scale defects created during the fabrication of the oxide layer. The size and density of these defects are believed to be strongly dependent on the intrinsic properties of the metal oxide laver. Changing the chemical composition of these coatings is one possible method to enhance the gas barrier properties of the films. In this work, aluminium oxynitride films, fabricated by reactive magnetron sputtering on Poly (ethylene terephthalate) substrates, have been investigated using a range of analytical techniques including: scanning proton microprobe; atomic force microscopy; scanning electron microscopy; transmission electron microscopy; uni-axial tensile testing; and gas permeation measurements to characterise the gas barrier properties of the film. The structural observations have been correlated with the measurements of the oxygen and water vapour permeation of the composite. Oxygen transmission rates as low as 1 cm(-3)/m(2) day . atm and water vapour transmission rates below 0.2 g/m(2) day have been measured. and these competitive values can be explained by the relatively low density of defects in the barrier layers.