Hydrogenated amorphous carbon (a-C:H) films on a silicon substrate have been prepared from toluene vapour by an r.f. plasma chemical vapour deposition method. The effect of oxygen on the composition and the surface morphology in the a-C:H films has been studied by adding a small amount of oxygen during deposition. Raman spectroscopy showed that the ratio of the amount of sp(3)-bonded carbon to that of non-sp(3)-bonded carbon is increased by the oxygen addition. By IR absorption measurements, it was found that absorption by the stretching of sp(3)-bonded carbon and hydrogen atoms is increased with increasing amount of oxygen added. These results suggest that non-sp(3)-bonded carbon is removed by oxygen during deposition. By visible light absorption measurements, it was found that the optical energy gap decreased with increasing amount of oxygen added. Volume resistivity measurements show that the resistivity has decreased with increasing amount of oxygen added. These changes in the optical energy gap and the volume resistivity can be explained by the assumption that hydrogen in the films is removed by oxygen. Observations of the surface by atomic force microscopy revealed that the centre-line average roughness of the films was reduced to approximately one-ninth by oxygen additions. These results show that oxygen addition during deposition plays an important role in removing non-sp(3)-bonded carbon and creating a smoother surface.