The large leakage currents of as‐made Au—CdSe diodes in reverse bias are observed to reduce progressively with continued exposure to ambients containing free oxygen. The effect is investigated by a combination of capacitance‐voltage and photoresponse measurements which are made in parallel with structural studies of the single crystal CdSe surfaces using RHEED. The latter indicate that the presence of free oxygen leads to disorder of the CdSe surface with the formation of a polycrystalline surface layer. It is suggested that this is responsible for the observed changes in the electrical characteristics. Assuming this to be the case, analysis of the capacitance‐voltage and photoresponse data enables estimates to be made of the interface state density and the polycrystalline surface layer thickness. Typically these are of the order of 5 × 1011 cm−2 eV−1 and 50 nm, respectively, for a diode after exposure to air at room temperature for a period of two months. Comparable effects are produced by heating the diodes in oxygen at 100 °C for 16 h. It is further shown that these estimated values of interface state density and polycrystalline layer thickness are sufficient to explain the generally observed independence of the barrier height in CdSe M‐S structures on the work function of the metal used.