The temperature induced optical and structural properties of thermally evaporated CdTe thin films have been investigated in the present work. The deposited films were annealed at 150 °C, 250 °C and 350 °C in air atmosphere and subjected to the UV–Vis spectrophotometer, XRD, source meter, SEM and EDAX for optical, structural, electrical, morphological and elemental analysis. The films are found to be crystallized in cubic zinc-blende structure with preferred orientation (111) and crystallinity is improved with annealing temperature. The optical absorbance is found to increase with annealing while energy band gap is observed to decrease. Different optical parameters like extinction coefficient, refractive index, relative density, dielectric constant and energy loss functions have been calculated using dielectric theory, Swanepoel model and Herve-Vandamme model. The surface morphology shows that the films are homogeneous, smooth and free from defects. The current-voltage characteristics show that the electrical conductivity is increased with annealing and resistivity is observed to decrease. The results confirm that films annealed at 350 °C may be used as absorber layer to fabricate CdTe/CdS solar cell devices. Display omitted •Enhancement of physical properties of vacuum evaporated CdTe thin films has been investigated.•Structural analysis reveals that the films are crystallized in cubic zinc-blende structure.•Optical band gap is found in the range 1.57–1.87 eV and observed to decrease with annealing temperature.•Electrical resistivity is observed to decrease with annealing.•Morphology studies show that the films are uniform, homogeneous and free from defects.