Although the cadmium chloride treatment is an essential process for high efficiency thin film cadmium telluride photovoltaic devices, the precise mechanisms involved that improve the cadmium telluride layer are not well understood. In this investigation we apply advanced micro-structural characterization techniques to study the effect of varying the time of the cadmium chloride annealing treatment on the micro-structure of cadmium telluride solar cells deposited by close spaced sublimation (CSS) and relate this to cell performance. A range of techniques has been used to observe the morphological changes to the micro-structure as well as the chemical and crystallographic changes as a function of treatment parameters. Electrical tests that link the device performance with the micro-structural properties of the cells have also been undertaken. Techniques used include Transmission Electron Microscopy (TEM) for sub-grain analysis and XPS for composition-depth profiling. The study provides a new insight in to the mechanisms involved in the initiation and the subsequent complete re-crystallization of the cadmium telluride layer.