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Indium oxide (In2O3) thin films sputtered at room temperature were annealed under different atmospheres and examined for thin-film transistor (TFT) active channel applications. The annealing process was performed in a rapid thermal annealing system at 350 °C under O2, Ar, forming gas (FG, 96% N2/4% H2), and N2. It was found that the annealed In2O3 TFTs exhibited high field-effect mobility (μFE >40 cm2V−1s−1), high on/off current ratio (Ion/off ~108), and controlled threshold voltage (VTH) for the enhancement- and depletion-mode operations. Note that the annealing atmosphere has a significant effect on the electrical performance of the In2O3 TFTs by inducing changes in oxygen-related species, particularly oxygen vacancies (VO) and hydroxyl/carbonate species (O–H/C–O). For the O2-, Ar-, FG-, and N2-annealed TFTs, μFE was in increasing order accompanied by a negative shift in VTH, which is a result attributed to the larger VO in the In2O3 thin films. Furthermore, the ΔVTH of the FG-, and N2-annealed TFTs in a positive bias stress (PBS) test was greater than that of the O2-, Ar-annealed devices, attributing to their lower density of O–H/C–O groups in the In2O3 thin films. Our results suggest that the annealing atmosphere contributes to the internal modifications of the In2O3structure and in turn altered the electrical characteristics of TFTs. These annealed In2O3 TFTs with high performance are promising candidates for realizing large-area, transparent, and high-resolution displays.