Titanium dioxide is extensively used as high index material for multilayer optical thin film device applications operating in the visible and near infrared region. The performance (high reflectance/transmittance and laser-induced damage) of the device is decided by the absorption in the films. The refractive index and extinction coefficient of films is strongly influenced by the deposition parameters and stoichiometry of the evaporation material. In the present investigation, films have been deposited by reactive electron beam evaporation of TiO, and in a neutral and ionized oxygen atmosphere. A Heitmann-type discharge source has been fabricated in the laboratory and used to ionize oxygen. Deposition parameters such as oxygen partial pressure to rate of deposition (60 to and substrate temperature (25 to were varied during the preparation of the films. The optical constants of films were estimated from the spectrophotometer data. In-situ optical monitoring of films with suboxides as the starting material showed the presence of considerable absorption in the films deposited in neutral oxygen, even under favorable deposition conditions. Postdeposition heating was necessary to reduce the absorption in the films. films with minimum absorption have been made using starting materials. Absorption-free films have also been obtained using ionized oxygen with the starting materials, even at higher substrate temperatures. The observed variation in optical properties has been explained on the basis of mismatches between the film growth and rate of oxidation. © 2002 Society of Photo-Optical Instrumentation Engineers.