We investigated the influences of residual oxygen (O) impurities, cubic indium oxide (β-In2O3) grains and indium oxy-nitride (InON) alloy grains in 200 nm-thick hexagonal (α)-InN crystalline films grown on Si(111) substrates by electron cyclotron resonance plasma-assisted molecular beam epitaxy. Although β-In2O3 grains with wide band-gap energy were formed in In film by N2 annealing, they were not easily formed in N2-annealed InN films. Even if they were not detected in N2-annealed InN films, the as-grown films still contained residual O impurities with concentrations of less than 0.5% ([O]≦0.5%). Although [O]∼1% could be estimated by investigating In2O3 grains formed in N2-annealed InN films, [O]≦0.5% could not be measured by it. However, we found that they can be qualitatively measured by investigating In2O3 grains formed by H2 annealing with higher reactivity with InN and O2, using X-ray diffraction and PL spectroscopy. In this paper, we discuss the formation mechanism of InON alloy grains in InN films. (© 2005 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim)