We observed the surface degradation of MgO single-crystal substrates stored in humid air after cleavage by atomic force microscope. Annealing at 1000-degrees-C in dry oxygen removed local defects though residual subgrain structure remains. The morphology of YBa2Cu3O7-delta (YBCO) films on the annealed and degraded substrates reflects these changes of the substrates. We confirmed that the annealing process of degraded substrate improves the film quality by measuring transition temperature T(c) and critical current J(c) of each film.