Aluminum-doped zinc oxide (AZO) thin films are widely investigated as indium-free transparent conductive oxides for photovoltaic devices, displays, touch panels, and other optoelectronic applications. In this study, AZO thin films were deposited by reactive magnetron sputtering from a custom-made two-element Zn-Al target to determine how deposition conditions affect the relationship between optoelectrical performance and mechanical durability. AZO thin films were deposited under three PE/PC conditions, corresponding to simultaneous changes in the effective power (PE) and the circulating power (PC): 100/50, 200/100, and 400/200 W/W. Here, PE denotes the effective discharge power delivered to the sputtering process, whereas PC denotes the circulating power of the DPS supply. The films were characterized by grazing incidence x-ray diffraction, scanning electron microscopy, atomic force microscopy, optical transmission, four-point probe measurements, nanoindentation, and Taber abrasion testing. All coatings exhibited a dominant ZnO (002) orientation, high visible transparency, and low sheet resistance. Increasing the PE/PC ratio improved the average visible transmittance from 76 to 84%, while also reducing the critical loss of electrical conductivity under tribological loading from approximately 2 × 104 to 4 × 104 cycles. Nanoindentation revealed comparable elastic modulus values for all films (70–77 GPa), whereas hardness was in the range of 6.2 to 7.3 GPa. Although topographical degradation at advanced wear stages was non-monotonic, abrasion tests and surface observations confirmed that 400/200 offered the best overall wear resistance. These results demonstrate that optimizing AZO thin films requires a multi-criteria strategy that balances transparency, conductivity and surface stability under prolonged mechanical contact.