Characterization of proton- exchanged optical planar waveguides in z- cutLiNbO3 fabricated using stearic acid and effects of annealing on the index profile,thewaveguide depth, the surface index changed and propagation loss have been studiedsystematically. Waveguide propagation losses decrease with annealing time and the variationin the surface refractive index and waveguide depth with annealing time follows a power lawrelationship.The annealing process is shown to be an effective means of improving and modifying waveguide properties.