Lead telluride is an important semiconductor of many applications. Many Investigators showed that there are anamolous descripancies in most of the electrophysical properties of PbTe polycrystalline thin films on annealing. X-Ray and electron diffraction studies are being undertaken in the present work in order to explain the cause of this anamolous behaviour.Figures 1-3 show the electron diffraction of the unheated, heated in air at 100°C and heated in air at 250°C respectively of a 300°A polycrystalline PbTe thin film. It can be seen that Fig. 1 is a typical [100] projection of a face centered cubic with unmixed (hkl) indices. Fig. 2 shows the appearance of faint superlattice reflections having mixed (hkl) indices. Fig. 3 shows the disappearance of thf superlattice reflections and the appearance of polycrystalline PbO phase superimposed on the [l00] PbTe diffraction patterns. The mechanism of this three stage process can be explained on structural basis as follows :