We investigate the influence of the ambient gas during thermal annealing on the photoluminescence (PL) properties of europium-silicate thin films. The films were fabricated on substrates by using a radio-frequency magnetron sputtering method and subsequent rapid thermal annealing (RTA). The mechanism for the formation of the europium silicates during the annealing process was investigated by using X-ray diffraction (XRD) spectroscopy, Auger electron spectroscopy (AES) and transmission electron microscopy (TEM). A series of narrow PL spectra from $Eu^{3+}$ ions was observed from the film annealed in $O_2$ ambient. Broad PL spectra associated with $Eu^{2+}$ ions, with a maximum intensity at 600 nm and a FWHM of 110 nm, were observed from the thin film annealed at $1000^{circ}C$ in $N_2$ ambient.