The effect of annealing temperature on the structural and optical properties of sputtered niobium–oxide films has been investigated. The temperature dependence of structure, density, and optical constants has been studied by Rutherford backscattering, x-ray diffraction, x-ray reflection, optical spectroscopy, and variable angle spectroscopic ellipsometry techniques. Rutherford backscattering measurements show no variation in the stoichiometry of the films upon annealing of amorphous Nb2O5 films, while amorphous NbO is oxidized to Nb2O5. X-ray diffraction studies show that as-deposited films are amorphous and only crystallize at around 500 °C. X-ray reflectivity studies reveal a continuous increase of film density with increasing annealing temperature. Optical spectroscopy and spectroscopic ellipsometry confirm that the refractive index n and the band gap Eg increase upon increasing annealing temperature. The variation of the refractive index with density of the niobium–oxide films is observed to follow the Clausius–Mossotti relation and the molecular electronic polarizability has been deduced from the straight line fit of Lorentz–Lorentz law.