Real time spectroscopic ellipsometry (RTSE) has been applied to study the deposition of polycrystalline CdTe, CdS, and CdTe1–x Sx thin films on crystalline silicon wafer substrates as well as the formation of CdS/CdTe and CdTe/CdS heterojunctions, all using a magnetron sputtering process. For CdTe and CdS, the key process variable is deposition temperature (T). The nucleation and growth behaviors of CdTe and CdS show strong variations with T and this influences the ultimate grain size of the polycrystalline films. For the co‐sputtered CdTe1–x Sx alloys, the key variables are the rf power levels applied to the CdTe and CdS targets and thus the resulting composition x. The dielectric functions of the alloys have been used as a database for real time investigation of inter‐diffusion at the CdS/CdTe and CdTe/CdS heterojunctions. (© 2008 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)