Polycrystalline silicon thin films that are permeable to fluids, known as permeable polysilicon, have been reported by several researchers. Such films have great potential for the fabrication of difficult to make MEMS structures, but their use has been hampered by poor process repeatability and a lack of physical understanding of the origin of film permeability and how to control it. We have completed a methodical study of the relationship between process, microstructure, and properties for permeable polysilicon thin films. As a result, we have determined that the film permeability is caused by the presence of nanoscale pores, ranging from 10-50 nm in size, that form spontaneously during LPCVD deposition within a narrow process window. The unusual microstructure within this process window corresponds to the transition between a semicrystalline growth regime, exhibiting tensile residual stress, and a columnar growth regime exhibiting compressive residual stress. A simple kinetic model is proposed to explain the unusual morphology within this transition regime. It is determined that measurements of the film residual stress can be used to tune the deposition parameters to repeatably produce permeable films for applications. The result is a convenient, single-step process that enables the elegant fabrication of many previously challenging structures.