We provide a systematic investigation of the effects of annealing on modal properties and second-harmonic generation in periodically domain-reversed LiTaO3 channel waveguides. Prism-coupling studies show complex spatial mode distributions and strong dependence of waveguide modal properties on index profiles. Second-harmonic measurements observe the recovery of the optical nonlinear coefficient by annealing. The optimum conversion efficiency is obtained in a very narrow window of annealing time. A considerably large shift in quasi-phase-matching wavelength is also documented. Measurement results are correlated with theoretical modeling. © 1998 American Institute of Physics.