Aluminium doped zinc oxide (AZO) thin films were prepared on glass substrate by spray pyrolysis technique and subsequently their structural, morphological and optical properties were investigated and analyzed as a function of annealing temperature. The films were deposited at 350°C and were annealed at temperature 350, 400, 450 and 500°C. X-ray diffraction (XRD) analysis confirms that both deposited and annealed films are polycrystalline in nature and have hexagonal wurtzite structure. The crystalline size as well as the crystalline quality of the film was found to increase with the increase of annealing temperature to a certain point. However, the dislocation density and the compressive stress induced in as-deposited AZO films reduce with annealing temperature. SEM image reveals that the deposited film has nanorope like morphology. The average diameter of the rope and the density of the morphology increases with the increase of annealing temperature. As the annealing temperature increases from 350°C to 450°C, the average transmittance of the films increases and the band gap value decreases from 3.25 eV to 3.17 eV. In addition, obtained results also show that urbach energy, extinction coefficient, refractive index, optical conductivity has changes noticeably with annealing temperature.