A hot-cathode plasma sputtering technique was used for fabricating the highly transparent and conducting aluminum-doped zinc oxide (AZO) films on glass substrates from a disk-shaped AZO (Al 2 O 3 : 2 wt.%) target. Under particular conditions where the target voltage was V T =−200V and the plasma excitation pressure was P S =1.5×10 −3 Torr, the lowest resistivity of 4.2×10 −4 Ω cm was obtained at 400nm, and this was associated with a carrier density of 8.7×10 20 cm −3 and a Hall mobility of 17cm 2 /V s. From the annealing experiment of the AZO films in the oxygen and nitrogen gases of the atmospheric pressure it was revealed that both the oxygen vacancies and the grain boundaries in the polycrystalline AZO film played an important role in the electrical properties of the film.