The nature of the dependence of refractive index, extinction coefficient, and packing density of zirconia films prepared by ion assisted deposition on the energy and current density of ions has been investigated. A broad beam Kaufman ion source has been used to generate oxygen ions in the energy range 100–700 eV and current densities up to 220 μA/cm2. It has been found that the refractive index increases steadily up to an energy of 500 eV beyond which there is a nominal decrease. The highest index obtained was 2.21 at an energy of 500 eV and a current density of 220 μA/cm2. Similarly, with an increase in the current density the refractive index increases initially and seems to saturate beyond a certain critical value dependent on the ion energy. The extinction coefficient was low up to an energy of 300 eV showing a marked increase thereafter. The extinction coefficient was also found to increase at high ion current densities and energies. A critical ion energy and current density beyond which the refractive index as well as the extinction coefficient of these films start deteriorating has been observed.