Zinc oxide (ZnO) films have been deposited on 1 μm SiO2/Si (100) substrates by rf magnetron sputtering. Using a sputtering gas of pure oxygen, a pressure regime is found in which the ZnO films grow on room temperature substrates with a single (0001) orientation, small grains (crystallite sizes ∼10–15 nm), and high intrinsic biaxial compressive stress (∼6 GPa). The effects of post-deposition annealing these films in air was investigated over a range of temperatures (200–1000 °C) and durations (2–2000 min). Annealing resulted in lower biaxial compressive stresses and increased average crystallite sizes in all films. Additional ZnO grain orientations were detected only after annealing above 500 °C for longer than 90 min, and the results are interpreted in terms of film recrystallization. Consequently, a relatively rapid thermal anneal at 1000 °C for 5 min caused grain recovery without recrystallization, resulting in maximum stress reduction (90%–100% of stress was relieved and average crystallized size tripled) while maintaining the original film orientation. The film surface area—measured by atomic force microscopy—decreased by up to 25% during annealing. X-ray photoelectron spectroscopy results indicate that although the surfaces of as-deposited films have a slight excess of oxygen, annealing as low as 200 °C results in a stoichiometric ZnO surface. High values of electrical resistivity (∼105 Ω cm) measured across the thickness of unannealed oriented films indicate low levels of elemental zinc clusters in the film bulk.