Cermet, e.g. Cr-Si-O, thin films are widely used in the electronics industry as high precision resistors. The film resistance depends on several parameters such as the degree of crystallinity and surface oxidation. Therefore, proper annealing steps are necessary to maintain the required precision and thermal stability. This paper discusses the effects of surface oxidation on the electrical resistance of the cermet film. Conventional and oxygen-resonance Rutherford backscattering spectroscopy and X-ray photoelectron spectroscopy were used to examine the bulk and surface composition of the film respectively. The results showed that annealing even under very low oxygen partial pressure (less than 10 -8 Torr) results in surface oxidation. The oxidation process is diffusion limited. Furthermore, annealing does not affect the bulk chemical composition; however, it affects the bulk resistivity. The change in electrical resistance was attributed to both the depth of surface oxidation and changes in the bulk resistivity. A model is proposed to describe the total change in the film resistance as a result of annealing.