Indium tin oxide (ITO) thin films were grown on glass substrates by direct current (DC) reactive magnetron sputtering at room temperature. Annealing at the optimal temperature can considerably improve the composition, structure, optical properties, and electrical properties of the ITO film. An ITO sample with a favorable crystalline structure was obtained by annealing in fixed oxygen/argon ratio of 0.03 at 400°C for 30 min. The carrier concentration, mobility, resistivity, band gap, transmission in the visible-light region, and transmission in the near-IR regions of the ITO sample were-1.6E+20 cm−3,2.7E+01 cm2/Vs,1.4E-03 Ohm-cm, 3.2 eV, 89.1%, and 94.7%, respectively. Thus, annealing improved the average transmissions (400–1200 nm) of the ITO film by 16.36%. Moreover, annealing a copper-indium-gallium-diselenide (CIGS) solar cell at 400°C for 30 min in air improved its efficiency by 18.75%. The characteristics of annealing ITO films importantly affect the structural, morphological, electrical, and optical properties of ITO films that are used in solar cells.