Thermal stability is an important property of graphene that requires thorough investigation. This study reports the thermal stability of graphene films synthesized by chemical vapor deposition (CVD) on catalytic nickel substrates in a reducing atmosphere. Electron microscopies, atomic force microscopy, and Raman spectroscopy, as well as electronic measurements, were used to determine that CVD-grown graphene films are stable up to 700 °C. At 800 °C, however, graphene films were etched by catalytic metal nanoparticles, and at 1000 °C many tortuous tubular structures were formed in the film and carbon nanotubes were formed at the film edges and at catalytic metal-contaminated sites. Furthermore, we applied our pristine and thermally treated graphene films as active channels in field-effect transistors and characterized their electrical properties. Our research shows that remnant catalytic metal impurities play a critical role in damaging graphene films at high temperatures in a reducing atmosphere: this damage should be considered in the quality control of large-area graphene films for high temperature applications.