Composites of conjugated poly(3-hexylthiophene) (P3HT) and the fullerene derivative[6,6]-phenyl-C61 butyric acid methyl ester (PCBM) demonstrate an efficient photogeneration of mobilecharge carriers. Thermal annealing of P3HT:PCBM based devices gives rise to asignificant increase of the photovoltaic efficiency, as follows from measurements ofthe external quantum efficiency and the current–voltage characteristics. Uponannealing, the absorption spectrum of the P3HT:PCBM composite undergoes a strongmodification, whereas in the pure components it remains unchanged. The absorption ofthe annealed blends becomes stronger and red shifted in the wavelength regionascribed to P3HT, while the absorption due to the PCBM contribution does notchange. Atomic force microscope measurements on P3HT:PCBM disclose somevariation in morphology due to the crystallization of PCBM. The concentration ofthe PCBM clusters and their size (up to 500 nm) were found to be correlatedwith the amount of PCBM in the blend. We have studied the performance ofphotovoltaic devices with different weight ratios of P3HT:PCBM, namely, 1:3, 1:2,1:1.5, 1:1, 1:0.9, 1:0.8, and 1:0.7. The photocurrent and the power conversionefficiency showed a maximum between 1:1 and 1:0.9. We conclude the variation in theabsorption spectrum and the red shift to result from molecular diffusion of PCBMout of the polymer matrix upon annealing. The growth of the PCBM clustersleads to formation of percolation paths and, therefore, improves the photocurrent.Above a certain concentration, the PCBM crystals provide mechanical stress onthe metal electrode, therefore possibly damaging the interface. Optimization ofthe composite weight ratio reveals the important role played by morphology forthe transport properties of bulk heterojunction P3HT:PCBM based solar cells.