A robust hydrophobic Y2O3 coating at high temperatures is important for industrial applications. In this study, Y2O3 thin films on Si substrates were prepared by reactive direct current magnetron sputtering. By changing the deposition power, Y2O3 thin films with different microstructures were obtained in poison mode and metallic mode, respectively. In order to understand the effect of heat treatment on the microstructure and hydrophobicity of Y2O3, the samples were annealed at 400 °C in the air. Compared to metallic mode, no crack was formed on the surface of the Y2O3 film prepared in poison mode. In addition, the water contact angle on the surface of the Y2O3 thin film deposited in poison mode was above 90° before and after annealing at 400 °C. It has been demonstrated that the initial high concentration of physically absorbed oxygen and its slow desorption process in a Y2O3 thin film prepared in poison mode contributes to the hydrophobicity of the thin film at high temperatures. These results can provide insights into the large-scale fabrication of hydrophobic Y2O3 coatings for high-temperature applications.