The effect of annealing on 800 nm thickness Ag60-xSe40Tex thin films were taken into account for their structural, surface morphology, and optical properties change for possible optoelectronic applications. The detailed analysis by X-ray diffraction and Raman study showed the structural change of the annealed thin films. The elemental% of the films was checked by Energy dispersive X-ray analysis and the surface scanning was done by field emission scanning electron microscopy. The transmission data were recorded by UV–Visible spectroscopy from which both nonlinear and linear entities are calculated based on empirical formulas. The formation of saturated bonds on annealing consequently influenced the different optical parameters for which the extinction coefficient increased and the optical bandgap decreased. There is an increase in linear refractive index, plasma frequency, carrier concentration, high-frequency dielectric constant, and optical electronegativity. In contrast, other essential properties such as χ3,χ1, and n2 decreased with an increase in Te% upon annealing. The observed optical changes upon thermal annealing are useful for optoelectronics and solar cell application.