Thin films of the transparent conducting oxide In 2 O 3 have been prepared in ultrahigh vacuum by reactive evaporation of indium. X-ray diffraction, optical, and electrical measurements were used to characterize properties of films deposited on transparent insulating mica substrates under variation of the oxygen pressure. Photoelectron spectroscopy was used to investigate in situ the interface formation between In 2 O 3 and the layered semiconductor InSe. For thick In 2 O 3 films a work function of ϭ4.3 eV and a surface Fermi level position of E F ϪE V ϭ3.0 eV is determined, giving an ionization potential I P ϭ7.3 eV and an electron affinity ϭ3.7 eV. The interface exhibits a type I band alignment with ⌬E V ϭ2.05 eV, ⌬E C ϭ0.29 eV, and an interface dipole of ␦ϭϪ0.55 eV.