Depositing optical coatings at ambient substrate temperature has been stimulating interest as it has a range of potential applications. However, developing such optical coatings especially using refractory oxides is challenging since they yield stable thin films mostly at elevated substrate temperatures. Gadolinia films (Gd₂O₃), in the present experiment, however, observed to form stable films at ambient substrate temperatures when deposited through reactive electron beam deposition. In addition, the films exhibited interesting optical properties such as reasonably high refractive index and wide band gap, which are rarely obtainable with conventional oxide materials. During the deposition, rate and oxygen pressure have been systematically varied. The deposited films have subsequently been characterized for optical and band gap related properties using spectroscopic phase modulated ellipsometric and spectrophotometric measurements. Atomic force microscopy has also been employed to study the surface topography and orphological changes under various deposition conditions. Both oxygen pressure and rate of evaporation have observed to greatly influence both the optical constant and surface topography of the gadolinia films.