During the fabrication process of a CdS/CdTe solar cell, oxygen is often present or intentionally introduced in the CdTe growth and annealing atmospheres. In this study a comparative study was carried out on the oxidation of thin CdTe films during the annealing process in air when coated with and without a CdCl2 layer, respectively. It was found that the presence of a thin CdCl2 coating layer on the CdTe film surface enhanced the oxidation of the CdTe surface. Near the film surface, the film was composed of a low-melting eutectic mixture of CdTe and oxides of CdTe and Te. The formation of the low-melting mixture was assisted by the much lowered melting point of CdCl2, the presence of oxides, and the CdTe compound. This low-melting layer enhanced the oxygen reaction with the CdTe film. The dominant oxide was CdTeO3. A CdTe solar cell with an efficiency of 9.9% was fabricated with a CdTe film subjected to an annealing in air at 400 °C with the presence of a CdCl2 coating layer.