This paper describes the formation of nanocrystalline tungsten oxide thin films by two-step thermal annealing of vacuum evaporated tungsten oxide films. The films were annealed at different temperatures to form semiconducting WO3 films suitable for gas sensor and other electronic device applications. It was found that the film annealed at 300 degrees C have a uniform nanocrystalline structure compared with high temperature annealed films. When these nanocrystalline films were re-annealed in higher temperature region (> 500 degrees C), no any variation of surface morphology and crystalline structure was observed. These experimental results indicated that stable nanocrystalline WO3 films could be prepared by two-step annealing. (c) 2004 Elsevier B.V. All rights reserved.