Transparent and conducting ZnO:Er:Yb thin films with visible up-conversion (660-nm emission under 980-nm excitation) were fabricated by RF magnetron sputtering. The as-deposited films were found to be transparent and conducting and the activation of the Er ions in these films to produce up-conversion luminescence was achieved by different post deposition annealing treatments in air, vacuum or by laser annealing using a Nd:YVO4 laser. The structural, electrical and optical properties and the up-conversion efficiency of these films were found to be strongly influenced by the annealing method, and a detailed study is reported in this paper. It has been demonstrated that, although the air annealing was the most efficient in terms of up-conversion, laser annealing was the only method capable of activating Er ions while preserving the electrical conductivity of the doped films. It has been shown that a minimum energy was needed in laser annealing to optically activate the rare earth ions in the ZnO host material to produce up-conversion. Up-converting and transparent conducting ZnO:Er:Yb films with an electrical resistivity of 5×10-2 Ω·cm and transparency ~80% in the visible wavelength range has been achieved by laser annealing.