A thermodynamically stable series of superlattices, (ZnO)kIn2O3, form in the ZnO-In2O3 binary oxide system for InO1.5 concentrations from about 13 up to about 33 mole percent (m/o). These natural superlattices, which consist of a periodic stacking of single, two-dimensional sheets of InO6 octahedra, are found to give rise to systematic changes in the optical and vibrational properties of the superlattices. Low-frequency Raman scattering provides the evidence for the activation of acoustic phonons due to the folding of Brillouin zone. New vibrational modes at 520 and 620 cm−1, not present in either ZnO or In2O3, become Raman active. These new modes are attributed to collective plasmon oscillations localized at the two-dimensional InO1.5 sheets. Infrared reflectivity experiments, and simulations taking into account a negative dielectric susceptibility due to electron carriers in ZnO and interface modes of the dielectric layer of InO2, explain the occurrence of these new modes. We postulate that a localized electron gas forms at the ZnO/InO2 interface due to the electron band alignment and polarization effects. All our observations suggest that there are quantum contributions to the thermal and electrical conductivity in these natural superlattices.