The annealing treatment effects on the nanostructure of the active layer based on P3HT and PCBM and its relation to the solar cell performance was studied. The UV-visible absorption spectra and the x-ray diffraction patterns indicated enhanced crystallinity upon annealing. The AFM showed that annealing increased surface roughness and the effect is more pronounced for the higher annealing temperature. J-V characteristics of the organic solar cells showed an enhanced performance for the active layer annealed at 140 degrees C compared to that annealed at 80 degrees C with efficiencies of 2.7% and 0.31% respectively.