High quality and lattice matched buffer layers are needed for the growth of device quality GaN thin films on sapphire for optoelectronic applications. In this context, we report the fabrication of AlN thin films having low defect densities through a novel process called solid phase epitaxial recrystallization (SPER). In this process, as-grown crystalline AlN thin films, having a large defect concentration (such as threading dislocations due to a large lattice mismatch between AlN and sapphire and low angle grain boundaries), were thermally annealed in an inert atmosphere at various temperatures ranging from 1200-1600° for 30 min. The as-grown and annealed samples were characterized using x-ray diffraction, transmission electron microscopy (TEM), Rutherford backscattering spectroscopy (RBS), atomic force microscopy (AFM) and UV-visible spectroscopy. The ion channeling/RBS and TEM results clearly indicate a substantial reduction in the defect density for the recrystallized AlN films. The surface morphology of the SPER AlN films was smooth with a surface roughness close to the unit cell height. The optical bandgap was sharp as compared to as-grown films, with a bandgap of 6.2 eV. The recrystallized films having smooth surface morphology and low defect densities may be useful for the growth of device quality GaN films on sapphire.