We have investigated the interdiffusion between CdTe and CdS resulting from post‐deposition annealing treatment. X‐ray diffraction (XRD) measurements reveal the presence of CdTe 1−x S x in the CdTe layer and CdS 1−y Te y in the CdS layer. x and y values are estimated to be 0.03 and 0.08, respectively, based on the measured lattice spacing. CdCl2 coated on the CdTe/CdS structure prior to annealing enhances significantly the degree of interdiffusion. The S diffusion profile in the CdTe layer is explored. A 10 meV decrease of CdS bandgap is observed as a result of interdiffusion.