A detailed optical and impedance study was performed on the structural evolution and phase transition of [NH4]6Mo7O24.4(H2O) (ammonium heptamolybdate tetrahydrate, AHM). The 1 h calcination of AHM from 50 °C to 675 °C in an ambient air atmosphere induced a phase transition from an unstable AHM to the most stable two-dimensional orthorhombic molybdenum oxide (α-MoO3−x) through various meta-stable crystal structures. The samples calcined at different temperatures were systematically analyzed and interpreted by powder x-ray diffraction, Fourier transform infrared spectroscopy, scanning electron microscopy and thermogravimetric analysis. From the observations and results, the decomposition pathway and the sequential phase evolution was identified as; (i) [NH4]6Mo7O24.4(H2O) (30 °C); (ii) [NH4]4(Mo8O24.8 (O2)1.2(H2O)2)(H2O)4 (ca. 50 °C to 75 °C); (iii) [NH4]8Mo10O34 (ca. 100 °C to 200 °C); (iv) [NH4]4Mo8O26 (ca. 225 °C to 275 °C); (v) MoO2.5(OH)0.5 (ca. 325 °C to 475 °C); (v) MoO2.69(OH)0.3 (ca. 575 °C) and (vi) MoO3−x (ca. 675 °C). The optical properties of the calcined samples were evaluated by diffuse reflectance spectroscopy measurements. Here, the optical band edge absorption Mo–O and inter-band absorptions exist in the visible region of the solar spectrum. The impedance spectroscopy analysis was used further in order to characterize the electrical properties of AHM. The electrical resistance (Z′) value was maximum at 300 °C and decrease with temperature inferring the negative temperature co-efficient of resistance behavior.