Abstract A computer simulation of grain growth in two dimensions has been used to model microstructural evolution in Ag (001)Ni thin films. Two orientation dependent driving forces have been included in the simulation: surface and interface energy and strain energy. Surface and interface energy and strain energy do not favor the growth of the same orientations and compete to determine the orientation and microstructure of the film. Growth of grains with (001) texture is favored in highly strained, relatively thick films, while growth of grains with (111) texture is favored by surface and interface energy minimization, especially in very thin films. When a film is constituted of only (001) and (111) grains, (001) texture can develop only if the yield stress of the (111) grains is sufficiently high to prevent yielding at early times. Experimental results confirm that (001) texture can develop in Ag (001)Ni films depending on the state of strain and film thickness.