Transparent conductive oxides such as indium tin oxide (ITO) are standards for thin film electrodes, providing a synergy of high optical transparency and electrical conductivity. In an electrolytic environment, the determination of an inert electrochemical potential window is crucial to maintain a stable material performance during device operation. We introduce operando ellipsometry, combining cyclic voltammetry (CV) with spectroscopic ellipsometry, as a versatile tool to monitor the evolution of both complete optical (i.e., complex refractive index) and electrical properties under wet electrochemical operational conditions. In particular, we trace the degradation of ITO electrodes caused by electrochemical reduction in a pH-neutral, water-based electrolyte environment during electrochemical cycling. With the onset of hydrogen evolution at negative bias voltages, indium and tin are irreversibly reduced to the metallic state, causing an advancing darkening, i.e., a gradual loss of transparency, with every CV cycle, while the conductivity is mostly conserved over multiple CV cycles. Post-operando analysis reveals the reductive (loss of oxygen) formation of metallic nanodroplets on the surface. The reductive disruption of the ITO electrode happens at the solid-liquid interface and proceeds gradually from the surface to the bottom of the layer, which is evidenced by cross-sectional transmission electron microscopy imaging and complemented by energy-dispersive X-ray spectroscopy mapping. As long as a continuous part of the ITO layer remains at the bottom, the conductivity is largely retained, allowing repeated CV cycling. We consider operando ellipsometry a sensitive and nondestructive tool to monitor early stage material and property changes, either by tracing failure points, controlling intentional processes, or for sensing purposes, making it suitable for various research fields involving solid-liquid interfaces and electrochemical activity.