The growth of InN quantum dots (QDs) on c-plane sapphire by droplet epitaxy (DE) using radio frequency plasma-assisted molecular beam epitaxy is reported here. The QD growth process from liquid In droplets to the InN QDs is described with a focus on the effect ambient nitrogen from an active RF-plasma source has on the formation of In droplets as a function of substrate temperatures. The variation in the shape and size of InN QDs is explained in terms of the In atom surface diffusion and the migration of droplets. Additionally, two nitridation procedures were used to investigate the crystallization of In droplets. The droplet formation was determined to follow well known principles of nucleation theory with ripening. The resulting activation energy for In surface diffusion on sapphire was found to be 0.62 ± 0.07 eV in ultra-high vacuum, ∼10−10 Torr, and 0.57 ± 0.08 eV in ambient N2, ∼10−5 Torr. The growth of InN QDs using the DE method has many advantages over the classical Stranski–Krastanov technique, including the ability to control a wide range of QD shapes, sizes, and densities.