Microwave plasma-enhanced chemical vapor deposition (PECVD) is a very promising method for industrial scale fabrication of microcrystalline silicon solar cells since the technique is well applicable for large areas, and high deposition rates can be obtained. We have investigated the effect of Ar dilution on the growth process and the material properties of microcrystalline silicon. The major benefit of Ar addition in the MWPECVD process, using H-2 and SiH4 as reactant gases, is an improved stabilization of the plasma, in particular at low pressure and MW power. We show, however, that material properties of the microcrystalline silicon layers deteriorate if we partly substitute H-2, by Ar during the deposition. The density of the layers - as expressed by the refractive index - decreases, and the defect density (measured by Fourier transform photocurrent spectroscopy) increases with increasing Ar flow. Investigation of the plasma by optical emission study shows that Ar atoms play a very active role in the dissociation processes of H-2 and SiH4. Substitution of H-2 by Ar decreases the SiH* emission and increases the Si* emission. On the other hand, the H-alpha/H-beta ratio increases upon substitution of H, by Ar. The latter effect shows that Ar addition does not lead to higher electron temperatures and we conclude that the changes of SiH* and Si* emissions are due to dissociation of SiH4 by Ar* (quenching reactions). The precise role of Ar in MWPECVD of microcrystalline silicon needs further investigation, but we conclude that the usage of this gas should be minimized in order to maximize the quality of the silicon layers. (C) 2006 Elsevier B.V. All rights reserved.