We report an infrared (IR) sensitive mixed phase of V7O16and V2O5thin films, grown by cathodic vacuum arc-deposition on glass substrates at relatively low temperatures. We have found that the mixed phase of V7O16and V2O5can be stabilized by post-annealing of amorphous VxOybetween 300–400 °C, which gets fully converted into V2O5after annealing at higher temperatures ∼450 °C. The local conversion from VxOyto V2O5has also been demonstrated by applying different laser powers in Raman spectroscopy measurements. The optical transmission of these films increases as the content of V2O5increases but the electrical conductivity and the optical bandgap decrease. These results are explained by the role of defects (oxygen vacancies) through the photoluminescence (PL) and time-resolved photoluminescence (TRPL) measurements. The IR sensitivity of the mixed phase is explained by the plasmonic absorption by the V7O16degenerate semiconductor.