Thin films of vanadium oxide(VOx) have been deposited by r.f. magnetron sputtering from V$_2$O$\_$5/ target in gas mixture of argon and oxygen. Crystal structure, surface morphology, chemical composition, molecular structure and optical properites of films in-situ annealed in O$_2$ambient with various heat-treatment conditions are characterized through XRD, SEM, AES, RBS, RTIR and optical absorption measurements. The films annealed below 200$^{C}$ are amorphous, and those annealed above 300$^{C}$ are polycrystalline. The growth of grains and the transition of vanadium oxide into the higher oxide have been observed with increasing the annealing temperature and time. The increase of O/V ratio with increasing the annealing temperature and time is attributed to the diffusion of oxygen and the partial filling of oxygen vacancies. It is observed that the oxygen atoms located on the V-O plane of V$_2$O$\_$5/ layer participate more readily in the oxidation process. Also indirect and direct optical band gaps were increased with increasing the annealing temperature and time.