Abstract Pulsed XeCl-excimer laser and Nd-modified lead–zirconate–titanate (PNZT) targets were used for the laser-ablation deposition of PNZT thin films on MgO(100) substrates. Films were post-annealed at 700, 800 and 900°C and optical transmission and reflection spectra were measured. AFM and XRD techniques were used for structural and surface quality characterization. In the films annealed at 700°C, the crystal structure was found to be polycrystalline and the surface quality and optical properties were found to depend also on the laser-beam fluence. However, in the films annealed at 800 and 900°C, a growth of large grains, where the crystal direction was perpendicular to the film surface, was found. The surface morphology and optical properties of the films were clearly improved. The band-gap energy E g ≈ 3.5 eV, refractive index n ≈ 2.1 and extinction coefficient k ≈ 0.014 at the wavelength of 600 nm were calculated.