Cadmium sulphide (CdS) thin films have been prepared by using a chemical bath deposition (CBD) method. Structural analysis (XRD and TEM) revealed that the films showed hexagonal structure with lattice constants a=0.4015 nm and c=0.6545 nm. On annealing, the films exhibited secondary phase of beta -CdS (cubic) along with hexagonal phase, but density of dislocations decreased. The stacking faults have been observed in the crystalline arrangement by high resolution transmission electron microscopy (HRTEM). The direct band gaps of as-grown and annealed films were found to be 2.42 and 2.62 eV with sub band gap of 2.35 eV, respectively, which were confirmed by optical analysis. On annealing, the resistivity of the films decreased from 3 x 10(6) to 1 x 10(3) Omega cm. Multiple Cd and S defects were observed by employing photoluminescence (PL) method. The intensities of emission peaks for annealed films differed with that of as-grown films. As was discussed with giving reasons.