The absorption coefficient spectra of the electrodeposited CdTe thin films were analyzed and compared with that of the single crystal. Pinhole-free thin films facilitated the analysis of the high-energy regions of the absorption coefficient spectra. The various allowed direct and indirect transitions were detected successively by subtracting the extrapolated values of the lower-energy transitions. The effect of heat treatment on the optical transitions were analyzed with films annealed at 300 degrees C in air, argon and CdCl2. The direct band gap of the electrodeposited films decreased with increasing film thickness and approaches the value of the single crystal. The films annealed at different environments show slightly lower value for the band gap. Annealing in argon caused significant change in the optical transition spectra.