Amorphous oxide semiconductors (AOS) possess many unique properties, including high carrier mobility and optical transparency, making them attractive as thin film transistors or transparent electrodes in photovoltaic devices. Unlike Si semiconductors or silica glasses with strong covalent directional bonds and well-defined polyhedral structure, AOS exhibit wide distributions in the nearest neighbor distances, coordination, and polyhedra distortions because of the weak ionic metal–oxygen bonding and spherically symmetric s-orbitals of posttransition metal atoms. Here, time- and temperature-dependent characteristics of the short- and medium-range structure in amorphous substoichiometric indium oxide are studied using ab initio molecular dynamics simulations and hybrid density-functional calculations. The results reveal that thermally induced extended bond rearrangements may switch shallow states into deep bound states and vice versa, affecting the number of carriers and their mobility as well as optical absorption. The structural transformations, coming at no cost in energy and "invisible" in a static characterization, are responsible for the observed conductivity instabilities and nonequilibrium relaxation in AOS under illumination or bias stress.