It is well known that the cadmium chloride annealing treatment is an essential step in the manufacture of efficient thin film cadmium telluride solar cells. It has been recognized that the combination of annealing at ∼4000C together with the addition of cadmium chloride at the surface induces re-crystallisation of the cadmium telluride layer and also affects the n-type cadmium sulfide. We have applied advanced micro-structural characterization techniques to distinguish the effect of the annealing and the cadmium chloride treatments on the properties of the cadmium telluride deposited via close space sublimation (CSS) and relate these observations to device performance. Transmission electron microscopy (TEM) has shown a variation in stacking fault density with annealing temperature and annealing time. Stacking faults observed within the cadmium telluride grains in TEM were partially removed post annealing; these findings show that temperature alone has a role in the reduction of stacking faults. However, since we have previously observed almost complete removal of stacking faults with annealing in combination with cadmium chloride, the cadmium chloride is essential to defect removal and high efficiency cells.