A recently developed UHV investigation cell is used to study the optical properties of thin silver films by spectroscopic ellipsometry in the wavelength range 440-800 nm. The films were deposited on clean Si(111) substrates at ambient temperature, they exhibited a single-crystal structure with a marked (111) orientation and smooth surfaces. The optical results can be described by a two-layer model if planar surface plasmons are taken into account. By annealing up to 350 degrees C the films crack, and silver clusters are formed on the silicon surface. The film as well as the cluster structure is independently characterized by SEM, LEED/Auger, X-ray diffraction, and resistivity measurements.