Y2O3 thin films were grown directly on Si (001) by MBE and annealed in-situ under UHV at various annealing temperatures. The samples were investigated in-situ by RHEED and ex-situ by HRTEM. A 7 to 15 Å thick non-uniform interfacial amorphous layer is observed in the as-grown sample. After annealing at 490°C under UHV for 30 minutes the amorphous layer is reduced and a sharp Y2O3/Si interface is obtained. At higher annealing temperatures, YSi2 islands start to form at the Y2O3/Si interface. I-V measurements performed on generic MIS structures show that the annealed samples exhibit higher leakage current density than the as-grown sample, due to reduction of the wide band gap interfacial layer. Leakage current densities in annealed samples remain below 1A/cm2, which is acceptable for future high-κ transistor fabrication.