Silver and indium bimetallic thin film couples have been studied by monitoring the contact and composite electrical resistance behaviour with time for both asdeposited and annealed specimens. X-ray diffraction (XRD), scanning electron microscopy (SEM) and transmission electron microscopy (TEM) studies have also been performed on the samples. Silver reacts with indium at room temperature with the formation of epsilon-AgIn2 phase, which is diffusion controlled, the activation energy being about 0.43 eV in the temperature range 318-40 1 K. The activation energy of grain boundary diffusion as determined from contact electrical resistance measurements is about 0.34 eV. Both XRD and TEM indicate the growth of epsilon phase, which gradually transforms to delta-Ag2In phase for silver-rich films. Indium diffusion through silver grain boundaries has been observed by SEM. A tentative explanation of the first phase formation is proposed.