Recently, we have obtained high-quality ZnO films by employing the low-temperature buffer layers followed by annealing. In the present paper, we report characteristics of as-grown and annealed initial layers grown by plasma assisted molecular beam epitaxy (PMBE) on (0 0 0 1)GaN/Al2O3 substrate. Initial layers grown at low temperature show a spotty RHEED pattern while the RHEED pattern changed to a sharp streaky one by annealing. AFM observation shows the initial layers to have granular 3D island morphology while giant step morphology is present in annealed sample, HRTEM observation confirms flat terraces with bilayer-height steps. An increase in intensity and decrease in FWHM value of the band-edge emission are observed in PL spectrum after annealing. Sharpness of free exciton transition in reflectance spectrum is improved in the annealed samples. The improvement of optical characteristics is due to the better crystal quality of the annealed samples compared to that of the as-grown samples.