AlN thin films have been grown on Si (100) substrates by reactive ion beam sputter deposition (IBSD) at different substrate temperatures varying from room temperature (RT) to 500oC. Substrate temperature induced microstructural transition from amorphous at RT, nanocrystalline at 300oC to microcrystalline at 400oC has been observed by Transmission Electron Microscopy (TEM). Average surface roughness (Ra) and morphology has been explored by using Atomic Force Microscopy (AFM). UV-VIS spectrophotometry has been employed to probe the substrate temperature induced changes in optical band-gap (Eg) of grown thin films in reflectance mode. It was found that Eg was increased from 5.08 to 5.21 eV as substrate temperature was increased from RT to 500oC. Urbach energy tail (Eu) along with weak absorption tail (WAT) energy (Et) have been estimated to account for the optical disorder which was found to decrease with associated increase in Eg.