The thermal degradation behavior of indium tin oxide (ITO) thin films coated on glass substrates using radio frequency (rf) magnetron sputtering was investigated over the temperature range of 100–400 °C in air. The resistivity of ITO films increases abruptly after the thermal degradation temperature of 250 °C is reached, with a slight increase from 200 to 250 °C. The x-ray photoelectron spectrometry intensity ratio of O/(In + Sn) in thermally degraded ITO films is higher than that in normal films. The carrier concentration gradually decreases up to 200 °C, sharply drops between 200 and 250 °C with increasing temperature, and then saturates from 275 °C. The Hall mobility drops suddenly at 275 °C. The diffusion of oxygen into oxygen interstitials and oxygen vacancies and the chemisorption of oxygen into grain boundaries decrease the carrier concentration and the Hall mobility, respectively. The former mainly affects the resistivity of ITO films below 250 °C, and the later above 250 °C.