Aluminum doped Zinc oxide (AZO) is a promising transparent conductor for solar cells, displays and touch-screen technologies. The resistivity of AZO is typically improved by thermal annealing at temperatures not suitable for plastic substrates. Here we present a non-thermal route to improve the electrical and structural properties of AZO by irradiating the TCO films with O+ or Ar+ ion beams (30–350 keV, 3 × 1015–3 × 1016 ions/cm2) after the deposition on glass and flexible polyethylene naphthalate (PEN). X-ray diffraction, optical absorption, electrical measurements, Rutherford Backscattering Spectrometry and Atomic Force Microscopy evidenced an increase of the crystalline grain size and a complete relief of the lattice strain upon ion beam irradiation. Indeed, the resistivity of thin AZO films irradiated at room temperature decreased of two orders of magnitude, similarly to a thermal annealing at 400 °C. We also show that the improvement of the electrical properties does not simply depend on the strain or polycrystalline domain size, as often stated in the literature.