The optical properties of the ordered defect compound CuIn5Se8, which crystallizes in a hexagonal structure, have been studied by the absorption technique. The analysis of the data shows that the band gap energy EG varies from 1.23 to 1.13 eV between 10 and 300 K. It is found that the variation of EG with temperature is due to the contribution of both acoustic and optical phonons with a characteristic phonon energy of about 14 meV. The optical absorption coefficient just below the absorption edge varies exponentially with photon energy indicating the presence of Urbach's tail. The phonon energy hvp associated with Urbach's tail, which is found to be 53 meV, is higher than the highest optical phonon mode reported for this compound, which is about 29 meV. The origin of the additional energy is attributed to the contribution of localized modes produced by structural disorder of low energy formation. An empirical relation, also used earlier in the case of 1:1:2 and other ordered defect compounds of the 1:3:5 phases, explains very well the variation of Urbach's energy with temperature.