To study the vacancy mechanism of In2O3, we apply the first‐principles method to study the influence of vacancy on the structural stability, electronic and optical properties of the rhombohedral In2O3. Two vacancies: In‐vacancy (V‐In) and O‐vacancy (V‐O) are considered here. The calculated results show that the rhombohedral In2O3 with In‐vacancy and O‐vacancy are thermodynamic and dynamical stabilities based on the vacancy formation energy and phonon dispersion. In particular, In‐vacancy has better thermodynamic stability in comparison to the O‐vacancy. Importantly, the rhombohedral In2O3 exhibits ultraviolet properties. However, two vacancies lead to the peak migration from the ultraviolet region to the visible light region. Furthermore, it is found that the calculated band gap of In2O3 with In‐vacancy is 1.07 eV, which is wider than the parent In2O3 (0.841 eV). Naturally, the wide band gap of In‐vacancy is that the removed In atom aggravates the difficulty of the electronic interaction between the conduction band and the valence band near the Fermi level. On the contrary, O‐vacancy shows metallic behavior because O‐vacancy (V‐O) enhances the electronic interaction near the Fermi level.