Device‐qualitya‐Si:H thin films, grown by rf magnetron sputtering, were annealed in the temperature range up to 850 °C and studied byinsituellipsometry, spectroscopic ellipsometry, and thermal evolution measurements. Annealing causes a volume reduction which can be as high as 5%, and after annealing atT≳800 °C the material becomes microcrystalline with an average crystallite size that depends on the annealing temperature. A detailed analysis of the peak height of the imaginary part of the pseudodielectric function ⟨&egr;(&ohgr;)⟩, combined with the examination of the fundamental gap, the average gap (Penn gap), and the refractive index ofa‐Si:H, provides new insight on the role of hydrogen and the structural modifications induced by thermal annealing. Based on the presented experimental findings we propose the following: (a) annealing belowTscauses reduction of the isolated microvoids; (b) the weakly bound hydrogen is correlated with regions with a high density of microvoids; and (c) the evolution of weakly bound hydrogen does not drastically influence the optical properties of the film while evolution of isolated hydrogen does. The rate of change of the optical properties as a function ofTis (a) nearly constant forTT<Ts, (b) increases forT≳Ts, and (c) decreases dramatically forT≳600 °C, therefore indicating irreversible structural changes atT≳Tsmainly due to isolated hydrogen loss.