Plasma magnetron sputtered thin films of AlN:Ho deposited on flat silicon substrates and optical fiber were characterized and analyzed for structural changes after thermal annealing at 1173 K for 40 min, by atomic force microscopy (AFM). The films grown, at liquid nitrogen temperature, on silicon substrates were amorphous while those deposited around optical fiber were crystalline. The films were also investigated for any change in the luminescence when thermal activation was performed for 40 min in a nitrogen atmosphere. The AFM analysis identified the existence of crystalline structures in parts of the films after thermal annealing. The x-ray diffraction could not provide those results. The films around optical fiber were crystalline even deposited at liquid nitrogen temperature. Clearly, amorphous films are hard to achieve on smaller substrate size. Direct observation of green emission is possible with naked eye, when the thermally annealed films are studied under cathodoluminescence. The green emission occurs at 549 nm as a result from 5S2 → 5I8 transition in Ho3+ that enhanced with thermal activation, making it a very useful candidate for photonic and optical devices applications. © 2010 American Institute of Physics.