Nanocrystalline germanium films containing erbium were deposited by thermal evaporation under 0.6 Torr of argon onto crystalline silicon wafer substrates. Weak broad photoluminescence (PL) around 1.5 &mgr;m was observed at room temperature. Annealing under 10−7Torr of vacuum for 3 h at 500 °C produced no change in the PL spectrum. After 1 h oxidation in air at 500 °C the PL intensity increased by an order of magnitude with reduction of the spectral linewidth and appearance of distinct structures, a portion of which is similar to that observed for Er‐implanted Si:O. Subsequent increase in oxidation time reduced the PL intensity slightly with no change in the spectral shape. The PL intensity exhibits a sublinear increase with pump power and approaches saturation at 200 mW. Raman spectra before and after anneal are also presented. Annealing increased the average grain size from 5 to 10 nm. The PL spectrum of erbium metal after oxidation in air at 500 °C is quite different from that of these oxidized Ge:Er films. ©1995 American Institute of Physics.