During the fabrication process of a CdS/CdTe solar cell, oxygen is often present or intentionally introduced in the CdTe growth and annealing atmospheres. In this study a comparative study was carried out on the oxidation of thin CdTe films during the annealing process in air when coated with and without a CdCl2 layer, respectively. It was found that the presence of a thin CdCl2 coating layer on the CdTe film surface enhanced the oxidation of the CdTe surface. Near the film surface, the film was composed of a low‐melting eutectic mixture of CdTe and oxides of CdTe and Te. The formation of the low‐melting mixture was assisted by the much lowered melting point of CdCl2, the presence of oxides, and the CdTe compound. This low‐melting layer enhanced the oxygen reaction with the CdTe film. The dominant oxide was CdTeO3. A CdTe solar cell with an efficiency of 9.9% was fabricated with a CdTe film subjected to an annealing in air at 400 °C with the presence of a CdCl2 coating layer.