Structural degradation of nanocrystalline ZnO films was observed with an increase in films thickness. Nanocrystalline epitaxial thin film with thickness of ∼170 nm changed to polycrystalline ∼900 nm with an increase in deposition time. Surface morphology revealed an average grain size of 30–50 nm. Spatial correlation model indicated structural disorder due to relative disorientation of crystalline phases at nanoscale. The photoluminescence spectra showed free exciton (FX) ∼3.31 eV, donor bound-exciton (DoX) ∼3.26 and donor-acceptor-pair (DAP) ∼3.22 eV for thin films, which redshift, i.e., FX ∼3.30, DoX ∼3.24 eV, and DAP ∼3.19–3.17 eV for thicker films (400–900 nm).