This study has been carried out to determine the optimal process conditions of $AZO:H_2$ thin films for the maximization of the transmittance of a blue GaN light-emitting diode (LED) with a wavelength of 470 nm. The Al-doped zinc oxide $(AZO):H_2$ thin films were deposited on a sapphire substrate by radio-frequency magnetron sputtering system with varying substrate temperatures, working pressures and annealing temperatures temperature, working pressure and annealing imposed on a AZO (2wt% $Al_2O_3$) ceramic target. The effect of these variables was investigated in order to improve the light extraction efficiency of the LED. As a result, the (002)-oriented peak was found in all the $AZO:H_2$ thin films. The lowest resistivity and the best transmittance at a wavelength of 470 nm was found to be $4.774;{ imes};10^{-4};{Omega}cm$ and 92% at a substrate temperature of $500^{circ}C$, working pressure of 7 mTorr and annealing temperature of $400^{circ}C$. The transmittance of the $AZO:H_2$ thin film for the Blue GaN LED was improved by approximately 13% relative to that of a ITO thin film (T = 79%).