The photo-induced insulator-metal phase transition of VO2 nanofilms under femtosecond pulse excitation is investigated using terahertz (THz) time-domain spectroscopy. A number of VO2 films are fabricated on sapphire substrates by direct current (DC) magnetron sputtering under different conditions. The film quality is evaluated by measuring the THz transmissions of the films in which photo-induced phase transition has occured and the results show that for a fixed sputtering time of 60 min VO2 films of high quality can be prepared when the annealing time and temperature are 60 s and 560 ℃, respectively. The degree of phase transition of the film fabricated under those best conditions can be as high as 80%. The conductivity of the film in the process of photo-induced phase transition in the THz range is determined based on thin film approximation, and calculations show that the real part of the conductivity is on the order of 103 Ω-1·cm-1. The complex dielectric constant and complex refractive index of the metallic-state thin film are further calculated based on the Drude model. The VO2 films fabricated on insulator substrates have an obvious threshold for the excitation pulse power and show a high degree of phase transition, which will play an important role in THz modulation devices.