Colossal dielectric constant materials have been attracting great attention for their applications in myriad types of miniaturized devices and high-energy-density storage fields. With the demand of size miniaturization in many microelectronic devices, colossal dielectric constant oxides have become essential for modern microelectronic devices, such as dynamic random access memory (DRAM) devices and on-chip capacitors. Recently, in order to obtain the high dielectric permittivity, but with acceptable dielectric loss and less frequency/temperature dependence, the introduction of localized lattice defect states is proposed. Using Nb5+ as electron-donors and In3+ as electron-acceptors is doped into rutile TiO2. And the reduction of Ti4+ ions is affected by the electron-acceptors in the local lattice defect clusters. Thus, the extraordinary colossal permittivity with low dielectric loss over a wide range of frequency and temperature is attributed to the electron-pinned defect-dipoles. There may be complex effects on the origin of novel colossal permittivity properties. In this work, (In1/2Nb1/2)TiO2 ceramics are prepared by the solid state reaction method, and the dielectric properties are studied. Starting materials (TiO2, In2O3, and Nb2O5 99.99%) are weighed as the composition (In1/2Nb1/2)0.05Ti0.95O2. The weighed batches are mixed, calcined, and pressed into disks. Finally, the samples are sintered at 1673 K for 10 h in air, and then some samples are annealed at 1273 K for 5 h in O2 atmosphere (purity 99.99%). The density of the sintered ceramics is initially measured using the geometrical method and then the Archimedes method. The microstructure of the sintered ceramics is investigated with a field electron gun scanning electron microscope (FEI Nova Nano-SEM 450). X-ray diffraction is performed on a Rigaku D/max 2250 diffractometer (Japan) with Cu Kα radiation (40 kV and 50 mA). The data for all the samples are measured with a slow scanning speed 0.01°/s. The crystalline structures are confirmed by using a T64000 Raman spectrometer (Horiba JobinYvon S.A.S., France) with an Ar laser (514.5 nm) operated at 50 mW. The closed cycle cryonic workstation (CFM-9T-H3-IVTI-25 Cryogenic Ltd, London) can provide the temperature range (10–270 K), and dielectric properties are measured at the different frequencies (20 Hz–1 MHz) through an Agilent 4980a LCR meter. The effect of the oxygen annealing on the microstructure, crystal structures and dielectric properties of (In+Nb) co-doped TiO2 ceramics is investigated. The results show that the crystal structure and microstructure are not changed with annealing processing. The annealing process has great effect on the dielectric properties above temperature 60 K. The activation energy changes prove that there possesses at least three different relaxation polarization mechanisms. Both hopping polarization and interfacial polarization are becoming inactive at low temperatures due to insufficient energy to overcome energy barrier for polarization. Complexes polarization associated with InTi′, NbTi·, TiTi′, VO¨ as well as InTi′-NbTi·, InTi′-VO¨-InTi′, InTi′-VO¨-TiTi′, NbTi·-TiTi′, TiTi′-VO¨-TiTi′ are still active as a polarization mechanism. Except for the gathering of the complexes polarization, the interfacial polarization at insulating grain boundary, and polaron polarization due to hopping electron is as co-existing polarization mechanisms in the (In1/2Nb1/2)TiO2 ceramics. The present work identifies the correlation between the colossal permittivity and polaron hopping process in the titled compound.