In this paper we report on the structural properties of as-grown CdS nanoparticles embedded in Al2O3 films produced by a magnetron RF-sputtering technique. Grazing incidence X-ray diffraction together with high-resolution transmission electron microscopy (HRTEM) and electron diffraction were used to study the crystallinity and morphology of the CdS nanocrystals. Depending on the deposition parameters, elongated or spherical nanocrystals were grown. HRTEM shows evidence of the growth of CdS nanocrystals at room temperature with sizes in the range of 3-8 nm, and indicates that the nanocrystals formed in the cubic phase during the early stages of the deposition process. Stress-free films were formed under selected deposition conditions. (C) 2002 Elsevier Science B.V. All rights reserved.