We studied the annealing effect on the structural, optical, and electrical properties of sputtered CuAlO2 films. It is found that the crystallinity of CuAlO2 films is improved with increasing the annealing temperature in N-2 ambient, and the film annealed at 900 A degrees C presents the excellent preferred (001) orientation in X-ray diffraction patterns as well as Raman scattering signals, A (1g) and E (g). The optical absorption edge of the annealed films is observed extremely complex. Four optical bandgaps estimated are distributed in the following energy regions: similar to 3.00, similar to 3.15, similar to 3.50, and similar to 3.75 eV, which might originate from different direct transitions in CuAlO2 energy band, respectively. For the annealed CuAlO2 films, the resistivity decreases three orders of magnitude, which is attributed to the contribution of intrinsic defects, Cu vacancy and interstitial oxygen.