Crystals of In2O3grown from a pure flux have inclusions and striations and, because of oxygen deficiency, are nonstoichiometric and almost black. The addition of MgO to the melt produces crystals that have no inclusions or striations, and that have optical properties characteristic of stoichiometric In2O3. Therefore, Mg acts as an efficient compensator of the oxygen deficiency. This paper describes the effect of MgO on the visible optical absorption spectrum and on the crystal defects. One possible model of the role of Mg in compensating In2O3is discussed briefly.