This study examined the microstructure evolution of sputtered Bi-Te films during post-annealing. Combining X-ray diffraction (XRD) and transmission electron microscopy (TEM) analyses, we unraveled the fundamental aspects of the materials process: The as-deposited film was not in the Bi(2)Te(3)-type phase but in a metastable phase based on a rock-salt structure. Annealing at an elevated temperature allowed the nucleation and growth of the stable phase from the film of the metastable phase in a typical manner of the heterogeneous phase transformation. In addition, the growth of the stable phase is found accountable for the remarkable improvements of the electrical and thermoelectric properties of the films observed after post-annealing. (C) 2011 The Electrochemical Society. [DOI: 10.1149/1.3598174] All rights reserved.