The environmental stability of solution processed Al-doped ZnO (AZO) thin films was enhanced by functionalizing the film surface with a thin self-assembled molecular layer. Functionalization of AZO films was performed using two types of molecules having identical 12-carbon alkyl chain termination but different functional groups: dodecanethiol (DDT) and dodecanoic acid (DDA). Surface modified AZO films were examined using electrical resistivity measurements, contact angle measurements and quantitative nanomechanical property mapping atomic force microscopy. The hydrophobic layer inhibits the penetration of oxygen and water into the AZO's grain boundaries thus significantly increasing the environmental stability over unmodified AZO. Surface modified AZO films using DDT exhibited lower electrical resistivity compared to DDA functionalized AZO films. Our study demonstrates a new approach for improving the physical properties of oxide based nanoparticulate films for device applications. (C) 2014 Elsevier B.V. All rights reserved.