Cadmium zinc-selenide (Cd0.7Zn0.3Se) thin films were deposited on the ITO substrate using chemical bath deposition techniques by optimizing the deposition parameters. The as-deposited films were annealed in air at 200, 300 and 400 °C for 1 h. The composition, surface morphology and structural properties of the as-deposited and annealed Cd0.7Zn0.3Se thin films were studied using x-ray photoelectron spectroscopy, scanning electron microscopy and x-ray diffraction techniques. The as-deposited films exhibited the hexagonal phase of CdSe and ZnSe. The films annealed at 200 °C showed the dominant cubic phase of CdSe and the hexagonal phase of ZnSe. However, the cubic structure of Cd0.7Zn0.3Se was transformed into a hexagonal structure after annealing at 300 and 400 °C. The lattice parameter a for the cubic structure was 6.0865 Å, whereas for the hexagonal structure a varied from 4.3035 to 4.2938 Å and c varied from 7.0916 to 6.9868 Å. The optical absorption spectra were recorded within the range 350–800 nm. The optical band gaps were 2.08 eV, 2.03 eV, 1.91 eV and 1.72 eV for the as-deposited films and those annealed at 200 °C, 300 °C and 400 °C, respectively. The drastic decrease in the optical band gap at 300 and 400 °C was due to the indium diffusion into the Cd0.7Zn0.3Se matrix.