We investigated defect reduction in laser crystallized polycrystalline silicon (poly-Si) films by heat treatment with 1.3 x 10(6)PaH(2)O vapor. The H2O vapor heat treatment at 260 degrees C for 6h reduced the spin density in laser crystallized poly-Si films from 2.0 x 10(18) (initial) to 6.5 x 10(16) cm(-3). The activation energy of the reaction for defect reduction was 0.26 eV. Photoconductivity under 532 nm light illumination at 100 mW/cm(2) was increased from 2.7 x 10(-6) (initial) to 3.3 x 10(-5) S/ cm by heat treatment for 1h. The oxygen concentration in the silicon films was increased by 1.1 x 10(19) cm(-3) by heat treatment, although the hydrogen concentration was decreased by 1.4 x 10(20) cm(-3). This suggests that oxygen atoms have an important role in defect state reduction in polycrystalline silicon films.