The nature of interaction between the water vapor and MoO3 thin films has been investigated using infrared spectroscopy technique. On prolonged exposure to high humidity conditions, presence of free water vapor and formation of Mo-OH bonds was detected in MoO3 films. Films exposed to high humidity for various durations and freshly deposited were intercalated with Mg ions under identical experimental conditions. Free water vapor and Mo-OH bonds did not prevent/hinder the intercalation process. The diffusivity (D) of Mg ions in MoO3 films has been estimated using Galvanostatic Intermittent Titration Technique (GITT) as a function Mg concentration. It is observed that D values are lesser in case of films exposed to humidity. Cyclic voltammetry studies carried out on films revealed reduced cyclability in exposed films compared to that of fresh films. (C) 2004 Published by Elsevier Ltd.