This work involves a comparative study of nanocrystalline titanium and indium oxides as well as TiO2-In2O3 composites prepared by a sol-gel method from concentrated hydrous titanium dioxide and indium hydroxide sols. Highly transparent uniform films were fabricated from the sols by a spin-coating technique. TiO2-In2O3 nanocomposites possess pronounced extreme dependencies of both the apparent bandgap and the refractive index on the film composition. No chemical interaction between the oxides was observed during annealing to temperatures between 200 and 700 degreesC. This behavior was attributed to the effect of surface states formed at the nanocrystallite interfaces. Other possible causes of the pronounced dependence of the optical and electronic properties on the TiO2-to-In2O3 ratio are also discussed. Abrupt changes in resistivity. photoresistivity and photocurrent decay time of the composite films were observed for composites where the TiO2 content ranged from 25 to 50 wt.% and are associated with the formation of a three-dimensional infinite cluster of interconnected In2O3 nanoparticles.