Si y O 1 − y : H (y=0.36 and 0.42) alloy films were fabricated by electron cyclotron resonance plasma enhanced chemical vapor deposition and subsequently annealed in (Ar+5%H2) at different temperatures. Glancing angle x-ray diffraction and Fourier transform infrared spectroscopy measurements revealed the formation of silicon nanoclusters (Si-ncl) in an amorphous SiO2 matrix for films annealed at temperatures of 900°C and above. Negligible photoluminescence (PL) was observed at room temperature for the as-grown samples; however, PL bands appeared in the visible after the annealing treatments. The PL intensities are much higher and the spectra skewed to the red as compared to data obtained for similar samples annealed in pure Ar. These effects are attributed to the passivation by H atoms of nonradiative recombination centers in the materials annealed in (Ar+5%H2). The overall analysis of the PL data indicates that both quantum confinement and defect states contribute to the luminescence. Two-step annealing procedures [in Ar and then in (Ar+5%H2)] were found to yield slightly higher passivation efficiencies than single annealing steps in (Ar+5%H2).