Zinc oxide (ZnO) is a wide-bandgap semiconductor with excellent optical and electrical properties, making it a promising material for a wide range of applications in optoelectronics and sensors. The properties of ZnO can be easily modified through doping and defect engineering, which determines its long-term stability and ultimate application. One of the most well-known dopants for ZnO is aluminum (Al), which is used to produce the transparent conductive oxide AZO. In this study, using positron annihilation spectroscopy (PAS) and photoluminescence (PL), we demonstrate defect engineering in AZO through millisecond flash-lamp annealing. We show that the nature of the defects strongly depends on the Al-concentration. The highest electrical conductivity of AZO is obtained at an Al:Zn layer ratio of 1:20, i.e., 2.64 at. % Al. Samples with higher Al content are more resistant to annealing and contain more defects. PAS results reveal the presence of zinc vacancies (V_Zn) and zinc–oxygen vacancy complexes (V_Zn+O) in the delta-AZO thin films, and although the PAS and PL results are generally consistent, slight differences suggest the possible existence of non-optically active defects that are not revealed by the PL measurements. Additionally, an appropriate amount of aluminum doping contributes to improving the crystallinity of ZnO.