Indium oxide is a gas sensitive semiconductor material. Its gas sensitivity is based on the variation of electrophysical properties when changing ambient gas composition [1].In the present study we have investigated the influence of nitrogen dioxide adsorption on the conductivity of nanocrystalline indium oxide. Nanocrystalline samples of In2O3 were prepared by sol-gel method with subsequent annealing of them at various temperatures. According to transmission electron microscopy and X-ray analysis the samples consist of grains of crystal In2O3 in cubic modification. Rising the annealing temperature of samples caused the increase of average grain size from 7¸8 nanometers for annealing temperature of 300 0С to 18¸20 nanometer in case of samples, annealing at T=700 0С. The obtained powders were pressed in tablets with thickness ~2 mm. To measure the electrical characteristics, gold contacts were vapor-deposited on the opposite surfaces of tablets. Measurements of thermopower have shown that samples possess n-type conductivity. The conductivity was measured at temperatures in the range from 290 to 370 K using a Keithley 6487 unit. Adsorption of nitrogen dioxide was performed by generator GDP-102 at various concentrations (2-8 ppm). The significant decrease of conductivity was detected under the NO2 adsorption. The variation of conductivity increased with decreasing the size of nanocrystals. Conductivity of In2O3 continued to decrease with increasing of gas concentration reaching saturation at 4 ppm. The analysis of temperature dependences of conductivity have shown that activation energy increases under the adsorption of NO2. The increase of activation energy during the adsorption of NO2 can be explained by Fermi level shift toward midgap energy and growth of potential barriers heights on the boundaries of nanocrystals. The height of potential barriers could have changed due to recharging surface states on the boundaries of nanocrystals under the adsorption. Thus, in the present work the influence of adsorption of nitrogen dioxide on the conductivity of nanocrystalline indium oxide was studied. An essential reduction of conductivity of indium oxide samples was detected under the gas adsorption. The model explaining the influence of NO2 adsorption on the charge carriers transfer in nanocrystalline indium oxide was suggested.