Thin films of 8 mol% yttria-stabilized zirconia (YSZ) of thickness ranging from 15nm-500nm have been deposited on Si3N4(90nm)/Si substrates by RF sputtering at room temperature. These samples have been studied using in situ ion scattering techniques including Rutherford backscattering spectrometry (RBS) and nuclear reaction analysis (NRA) to analyze the oxygen distribution and defect chemistry as a function of annealing in various oxidizing and reducing ambient upto 500°C. In addition, the structural quality of these films after long time annealing has been investigated using grazing incidence X-ray diffraction (GIXRD). Temperature dependent X-ray absorption spectroscopy (XAS) has been performed to study the unoccupied density of states and chemical nature of YSZ. In this paper, we will discuss in detail the effects of annealing in different ambient on the defect chemistry, structure and stability of films in these materials systems.