An indium oxynitride (InON) quantum dot (QD) layer was inserted between the indium nitride (InN) and p-type gallium nitride (GaN) films for improving the conversion efficiency of the heterostructure solar cells. The InN/InON QD/p-GaN heterostructure solar cells exhibited a high open-circuit voltage of 2.29 V, short-circuit current density of 1.64 mA/cm2, and conversion efficiency of 1.12% under AM 1.5G illumination. Compared with samples without InON QDs, the power conversion efficiency of sample with InON QDs increased twofold; this increase was attributed to the increase in short-current density. The external quantum efficiency of 250-nm-thick InN/p-GaN heterostructure solar cells has a highest value of 6.5% in the wavelength range of 700–1100 nm. The photogenerated holes separated in the depletion region of InN thin films is difficult to transport across the energy barrier between the InN and p-GaN layers. The oxygen vacancy assisted carrier transport in the InN/InON QD/p-GaN sample, which was evidenced in its current–voltage (I–V) and capacitance–voltage (C–V) characteristics. The dark I–V characteristic curves in the bias range of −2 to 2 V exhibited ohmic behavior, which indicated the absence of a transport barrier between the InN and p-GaN layers. In addition, a shoulder peak at −0.08 V was observed in the high-frequency (60–100 kHz) C–V characteristic curves corresponding to carrier capture and emission in the shallow defect state of oxygen vacancy in the InON QDs. The oxygen vacancy exists inside the InON QDs and generates the interface states in the InON QD/p-GaN interface to form a carrier transport path. Thus, more photogenerated holes can transport via the InON QDs into the p-GaN layer, contributing to the photocurrent and resulting in high conversion efficiency for the InN/InON QD/p-GaN heterostructure solar cells.