Post deposition heat treatment induced modifications in nanoplasmonic response in glancing angle deposited (GLAD) Ag nanostructures were systematically investigated. The as deposited GLAD Ag thin films were annealed at various temperatures namely 200°C, 250°C, 300°C and 350°C in air atmosphere. The reduction in localized surface plasmon resonance (LSPR) absorption peak width was detected with annealing. Morphological characterization of the as deposited and annealed films revealed reduction in grain size and shape distributions responsible for narrowing of the LSPR peak width. The refractive index sensitivities of the as deposited and annealed films were measured using an in‐house developed optical setup and figure of merit (FOM) of the sensors were also estimated. An increase in FOM of the sensors was observed upon annealing while sensitivity was found to be reduced. E‐field profile surrounding the Ag nanoparticles was also simulated to explain the experimental observations on refractive index sensitivity of the films.This article is protected by copyright. All rights reserved.