We demonstrate here defect induced changes on the morphology and surface properties of indium oxide (In2O3) nanowires and further study their effects on the near-band-edge (NBE) emission, thereby showing the significant influence of surface states on In2O3 nanostructure based device characteristics for potential optoelectronic applications. In2O3 nanowires with cubic crystal structure (c-In2O3) were synthesized via carbothermal reduction technique using a gold-catalyst-assisted vapor-liquid-solid method. Onset of strong optical absorption could be observed at energies greater than 3.5 eV consistent with highly n-type characteristics due to unintentional doping from oxygen vacancy [Formula: see text] defects as confirmed using Raman spectroscopy. A combination of high resolution transmission electron microscopy, x-ray photoelectron spectroscopy and valence band analysis on the nanowire morphology and stoichiometry reveals presence of high-density of [Formula: see text] defects on the surface of the nanowires. As a result, chemisorbed oxygen species can be observed leading to upward band bending at the surface which corresponds to a smaller valence band offset of 2.15 eV. Temperature dependent photoluminescence (PL) spectroscopy was used to study the nature of the defect states and the influence of the surface states on the electronic band structure and NBE emission has been discussed. Our data reveals significant broadening of the NBE PL peak consistent with impurity band broadening leading to band-tailing effect from heavy doping.