The deposition of CuInO2 films was achieved for the first time through a dual-target RF magnetron sputtering technique using Cu and In2O3 targets. It is found that the sputtering power of the Cu target has a significant effect on the structural, morphological, and optical characteristics of the films. The sputtering power of Cu was varied from 5 W to 50 W while the sputtering power of In2O3 was held constant at 50 W. From the XRD analysis, it was confirmed that pure-phase CuInO2 was obtained at a Cu sputtering power of 5 W. XPS analysis revealed that Cu exists in the oxidation state of 1+ in the films sputtered with 5 W Cu, further confirming the successful synthesis of single-phase CuInO2. The oxidation states of Cu and In, full-width half maximum (FWHM), peak positions, satellite peak positions, and their respective binding energies have been elucidated through XPS analysis. Nanocrystalline growth was confirmed through SEM analysis performed on all the post-deposition annealed films. Further, it was observed that grain size increased from 18.49 nm to 63.34 nm as Cu sputtering power is increased from 5 W to 50 W. The optical studies were performed on the post-deposition annealed films in the 300–800 nm wavelength range. The optical transmission and the optical bandgap were found to decrease with an increase in the Cu sputtering power. The highest transmission of ∼75% and the highest bandgap of 3.62 eV was obtained for the films showing single-phase CuInO2.