A method for forming a thin film resistor with improved thermal stability is disclosed. A substrate having thereon a first dielectric layer is provided. A resistive material layer is deposited on the first dielectric layer. A capping layer is deposited on the resistive material layer. The resistive material layer is then subjected to a thermal treatment at a pre-selected temperature higher than 350 degrees Celsius in a hydrogen or deuterium atmosphere. The capping layer and the resistive material layer are patterned to form a thin film resistor on the first dielectric layer.