The electrical and optical properties of the Ag contacts have been investigated as a function of the annealing temperature. The as-deposited contact becomes good Ohmic with contact resistivity of 2.47 X 10(-4) Omega cm(2) and produces reflectance of similar to84% when annealed at 330 degreesC for I mm in air ambient. However, annealing at 530 degreesC results in nonlinear current-voltage behavior and degraded reflectance. The light output of InGaN/GaN blue light emitting diodes (LEDs) fabricated with the as-deposited Ag contact shows somewhat better output performance than those of LEDs with the annealed Ag contacts. Based on the transmission electron microscopy-energy dispersive x-ray analysis, synchrotron x-ray diffraction, and x-ray photoemission spectroscopy results, possible mechanisms for the ohmic formation and degradation of the Ag contacts are described. 0 2005 American Institute of Physics.