Harvesting waste heat efficiently with thermoelectric energy conversion requires materials with low thermal conductivity. Recently, it was demonstrated how dynamic lone pair expression in thermoelectric InTe is responsible for giant anharmonicity leading to a very low lattice thermal conductivity. InTe also contains correlated disorder of intrinsic defects due to vacancies, and this contributes to additional lowering of the thermal conductivity. Here we use the three-dimensional difference pair distribution function (3D-ΔPDF) to analyze 25 K single crystal diffuse X-ray scattering from InTe to unravel the local defect structure, and propose a microscopic structural model. Extended off-centering of In+ ions induced by vacancies allows for the local expression of stereochemically active lone pairs. The associated electronic stabilization is proposed to be a driving force for the formation of In+ vacancy defects in InTe.