Aluminum nitride (AIN) thin films were prepared by the ion beam assisted deposition method. The effect of the nitrogen ion beam energy on mechanical properties and residual stresses was studied by changing the ion beam energy from 0.2 to 1.5 keV, resulting in a different film microstructure. Mechanical properties were examined by a nano-indentation method and residual stresses were evaluated from the film curvature measured by an optical cantilever system. All of the films were found to be in a compressive stress state, the value of the stress decreasing with the ion beam energy. It was also observed that the films became soft and plastic with increasing ion beam energy. To study the effect of thermal treatment on the relaxation of residual stresses, films prepared with the ion beam energies of 0.2 and 1.5 keV, which show a columnar and a granular structure, respectively, were annealed in nitrogen at 500 degrees C. It was found that the granular structure film is relaxed more easily than the columnar structure film.