Highly c axis oriented zinc oxide (ZnO) thin films have been prepared on 1737 Corning glass substrate by planar rf magnetron sputtering under varying pressure (10–50 mTorr) and different oxygen percentage (40%–100%) in reactive gas mixtures. The as-grown ZnO thin films were found to have stress over a wide range from -6×1010 to -9×107 dynes/cm2. The presence of stress depends strongly on processing conditions, and films become almost stress free under a unique combination of sputtering pressure and reactive gas composition. The studies show a correlation of stress with structural and electrical properties of the ZnO thin film. The stressed films possess high electrical conductivity and exhibits strong dielectric dispersion over a wide frequency (1 kHz–1 MHz). The dielectric constant ε′(ω) of stress free ZnO film was almost frequency independent and was close to the bulk value. The measured value of dc conductivity, σdc(ω) and ac conductivity σac(ω) of stress free ZnO film was 1.3×10-9 and 6.8×10-5 Ω-1 cm-1, respectively. The observed variation in the structural and electrical properties of ZnO thin film with stress has been analyzed in the light of growth kinetics.