Indium oxide (In2O3) and indium tin oxide (ITO) thin films have been investigated for high temperature thermocouple and strain guage applications. Reactive sputtering in nitrogen-rich plasmas was used to improve the high temperature stability of indium oxide-based films in air and scanning electron microscopy was used to follow the microstructural changes in the nitrogen-processed films. When thermally cycled at temperatures above 800°C, a partially sintered microstructure comprised of nanometer-sized crystallites was revealed. A densified layer was also formed on the surface, which acted as an oxygen-diffusion barrier in the bulk film. This combined with a network of partially sintered oxynitride crystallites lead to considerable open porosity and a stabilizing effect on the ensuing electrical properties. In this article, the thermoelectric properties of nitrogen-processed films were evaluated at temperatures up to 1400°C. To study the effect of nitrogen plasma processing on the sintering kinetics and associated densification, the constrained sintering of the resulting films was followed as a function of time and temperature. Based on the measured thermoelectric properties of the nitrogen processed films, drift rates on the same order of magnitude as commercial type K wire thermocouples were realized for these all-ceramic thermocouples.