ZnO thin films were deposited using RF sputtering by varying the argon:oxygen gas flow rates and substrate temperatures. Structural, optical and electrical characterization of ZnO thin films were systematically carried out using X-Ray diffraction (XRD), scanning electron microscopy (SEM), UV–visible spectroscopy, X-Ray photoelectron spectroscopy (XPS) and Hall measurements. Film deposited at room temperature and annealed at 300 °C exhibited low O2 incorporation with localized defects and a high percentage of Zn interstitials. A large crystalline size and fewer grain boundaries resulted in a high Hall mobility of 46.09 cm2/V-s Deposition at higher substrate temperatures resulted in improvement in O2 incorporation through the annihilation of localized defects and decrease in oxygen vacancies and Zn interstitials. Urbach tails within the bandgap were identified using the absorption spectrum and compared with the % defects from XPS. Bottom-gate thin-film transistors were subsequently fabricated on a SiO2/p-Si substrate using the combination of RF sputtering, wet etching and photolithography. Variation in the substrate temperature showed performance enhancement in terms of the leakage current, threshold voltage, sub-threshold swing and ION/IOFF ratio. Thin-film transistor (TFT) devices deposited at 300 °C resulted in an O2-rich surface through chemisorption, which led to a reduction in the leakage current of up to 10−12 A and a 10-fold reduction in the sub-threshold swing (SS) from 30 V to 2.8 V. Further TFT optimization was carried out by reducing the ZnO thickness to 50 nm, which resulted in a field-effect mobility of 1.1 cm2/V-s and ION/IOFF ratio of 105.