Aluminum-doped zinc oxide (AZO) films have potential applications in photoconducting and piezo-electric devices, and gas and piezo sensors. Although the film structure and optical properties are intensively studied, the effect of gas flow ratio of O2 to Ar (GFR) on the film structure and optical properties has not been reported in terms of macrostress and lattice strain. In this paper, a series of AZO films is deposited on glass substrates by direct-current pulse magnetron reactive sputtering under different GFRs. The influence of the GFR on the crystalline structure, the surface topography, and the optical properties of the film is systematically studied in terms of macrostress and lattice strain by using X-ray diffractometry, scanning electron microscopy and spectrophotometry, respectively. The as-deposited AZO films are polycrystalline and (103) oriented, which can be attributed to the change in crystalline face energy during the accompanied thermal annealing for 3 h. The film tensile stress first increases to a maximum value, and then decreases gradually with GFR values increasing. It is noted that the transition from tensile to compressive stress occurs with GFR increasing. This result is different form that of lattice strain. The film transmissivity in the visible region first decreases and then increases with GFR increasing, which is attributed mainly to the scattering of grain boundary induced by the grain size.