Zinc oxide is widely used as transparent contact in thin film solar cells. We investigate the damp heat stability of aluminum doped ZnO (ZnO:Al) films sputter deposited at different conditions. Increase in resistivity upon damp heat exposure was observed for as-deposited ZnO:Al films and the water penetration was directly linked to this degradation. Deuterium was used as isotopic marker to identify the amount of water taken up by the films. Finally, we applied a special annealing step to prepare highly stable ZnO:Al films with charge carrier mobility of 70 cm2/Vs after 1000 h of damp heat treatment. A grain boundary reconstruction model is proposed to explain the high stability of ZnO:Al films after annealing.