Optical absorption of undoped and Fe-doped LiNbO 3 crystals grown under various oxygen partial pressures, P O 2 , has been investigated. The 2.9 eV band found in undoped crystal forms only during the growth process and is proportional to P 1 4 O 2 . This band consists of the superposition of three broad absorption bands A 1, A 2, and A 3, and is assigned to a hole localized on an oxygen ion. The 2.5 eV band found in a crystal grown in a reduced atmosphere is identified as an oxygen vacancy rather than an anti-site Nb as determined by the measurement of density and by performing optical bleaching experiments. The concentrations of the oxygen vacancies are very sensitive to the presence of Fe impurities in the as-grown crystals. Based on these results, it is proposed that lithium niobate is best formulated as [ Li (1 − x) Nb 2 5 ][ Nb] O (3 + δ) where x and δ represent the deviation from stoichiometry.