We have studied systematically the role of silver in improving microstructure and properties of Y 1 Ba 2 Cu 3 O 7Ϫ␦ ͑YBCO͒ thin films. We have more than doubled the grain size to nearly 1.8 m and reduced processing temperatures by incorporating Ag in the YBCO films, which is accomplished by using a composite target containing 15% by weight of Ag. These films show approximately four times higher J c than the best films obtained on MgO͑001͒ substrates deposited from stoichiometric Y 1 Ba 2 Cu 3 O 7Ϫ␦ targets. Study of the silver content in the film as a function of the deposition temperature shows clearly a decreasing concentration with increasing temperature and a segregation of the Ag to the surface. The increased oxygen content in the films is also observed at lower processing temperatures, providing strong support for the efficient oxygenation of YBCO via the presence of silver. A qualitative model suggests that the formation of silver oxide, rapid surface diffusion of Ag on MgO surfaces, and the nonreactivity of Ag with YBCO are the key aspects to the improvement in microstructure. The possibility of extending these ideas to the growth of oxides is also discussed, along with the fabrication of in-situ superconducting-metal junctions with 3D geometries.