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The authors have investigated the effects of indium tin oxide (ITO) deposited by ion beam assisted e-beam evaporation on the performance of polymer light-emitting diodes. ITO was evaporated as a cathode onto a thin Mg:Ag layer by an e-beam process, and its performance as a transparent cathode was subsequently compared to that of Mg:Ag and sputtering-prepared ITO. Polymer devices’ luminance and efficiency were improved by more than ten times by ion beam assisted deposition (IBAD)-prepared ITO deposition, with little observable damage to the organic layer. Implementation of the IBAD process resulted in the reduction of the interfacial energy barrier which induced band bending. Furthermore, outcoupling with ITO resulted in enhanced luminance.