ZnO is an efficient luminescent material in the UV-range ∼3.4 eV with a wide range of applications in optical technologies. Sputtering is a cost-effective and relatively straightforward growth technique for ZnO films; however, most as-grown films are observed to contain intrinsic defects which can significantly diminish the desirable UV-emission. In this research the defect dynamics and optical properties of ZnO sputtered films were studied via post-growth annealing in Ar or O2 ambient, with X-ray diffraction (XRD), imaging, transmission and Urbach analysis, Raman scattering, and photoluminescence (PL). The imaging, XRD, Raman and Urbach analyses indicate significant improvement in crystal morphology and band-edge characteristics upon annealing, which is nearly independent of the annealing environment. The native defects specific to the as-grown films, which were analyzed via PL, are assigned to Zni related centers that luminesce at 2.8 eV. Their presence is attributed to the nature of the sputtering growth technique, which supports Zn-rich growth conditions. After annealing, in either environment the 2.8 eV center diminished accompanied by morphology improvement, and the desirable UV-PL significantly increased. The O2 ambient was found to introduce nominal Oi centers while the Ar ambient was found to be the ideal environment for the enhancement of the UV-light emission: an enhancement of ∼40 times was achieved. The increase in the UV-PL is attributed to the reduction of Zni-related defects, the presence of which in ZnO provides a competing route to the UV emission. Also, the effect of the annealing was to decrease the compressive stress in the films. Finally, the dominant UV-PL at the cold temperature regime is attributed to luminescent centers not associated with the usual excitons of ZnO, but rather to structural defects.