As-deposited sol-gel derived amorphous tungsten oxide films transform into nanostructured films with an interconnected framework of grains and pores and a dominant triclinic crystalline phase upon annealing at 250°C. Transmission electron microscopy and scanning electron microscopy images clearly reveal the annealing-induced microstructural evolution for the film. Subsequent to lithium intercalation, the film annealed at 250°C shows quasi-reversible structural changes, as ascertained by X-ray diffraction and Fourier transform infrared spectral data. Dynamic transmission modulation for film revealed a high optical modulation of 72% (λ=650 nm) and a coloration efficiency maximum of 132 cm2 C-1 at 800 nm under a lithium intercalation level of x=0.20. X-ray photoelectron spectroscopy of the W 4f core levels demonstrated a progressive increase in the W5+ content at the expense of W6+ proportion as the insertion coefficient was raised from 0 to 0.25, with 0.20 as the threshold value above which the W5+ content exceeds the W6+ proportion. A new W4+ state also appears which acts to lower the coloration efficiency for x≥0.22. The presence of charged oxygen interstitials in the vicinity of electrochemically active tungsten sites is also responsible for the coloration efficiency decline at high ion insertion levels. © 2006 The Electrochemical Society. All rights reserved.