A nanocrystalline tungsten oxide photochromic thin film was prepared by colloid chemistry method. The microstructure, phase transition involved in the solution process, photochromic behavior, and mechanism of the film were investigated by means of transmission electron microscope, x-ray diffraction, ultraviolet-visible absorption spectra, and x-ray photoelectron spectra. It was found that the particle size and crystallinity of the thin film could be easily controlled by adjusting the concentration of oxalic acid in the colloid solution of tungsten oxide hydrate. With the increase of the oxalic acid concentration, the size of nanoparticles in the film decreased sharply, and meanwhile, a blue shift of the absorption peaks caused by the quantum size effect was observed accordingly. With the increase of the pH in the solution, tungsten oxide hydrate was gradually transformed into an oxided 12-tungstate with Keggin structure, which led to the change of photochromic property of the films. The photochromism of the film is believed to be due to the electron transfer between the different valence states of tungsten ions located in adjacent sites.