In this work, we describe the synthesis of CdS nanocrystals in thin polymeric films by in-situ Grazing Incidence Diffraction (GID) and Grazing Incidence Small Angle Scattering (GISAXS). The 2D GISAXS patterns indicate how the precursor structure is altered as the temperature is varied from 25°C to 300°C. At 150°C, the CdS nanocrystals start to arrange themselves in a hexagonal lattice with a lattice parameter of 27 Å. The diffraction intensity from the hexagonal lattice reaches a maximum at 170°C and decreases steadily upon further heating above 220°C indicating loss of symmetry. Correspondingly, the GID scans at 170°C show strong crystalline peaks from cubic CdS nanocrystals that are about 2 nm size. The results indicate that a temperature of 170°C is sufficient to synthesize CdS nanocrystals without degradation of the polymer matrix (Topas) in thin films (about 30nm).