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Fe-doped In2O3 thin films are deposited on sapphire substrates using pulsed laser ablation. The effects of Fe concentration and oxygen partial pressure on the structure, magnetism and transport properties of (In1-xFex)2O3 films are studied systematically. A detailed analysis of the structural properties suggests the substitution of Fe dopant ions with mixture valences and rules out the presence of clusters and secondary phases as the source of ferromagnetism. Systematic investigations of transport properties for (In1-xFex)2O3 films with a wide range of carrier densities reveal that they occur in both metallic and insulating regimes. The insulating films exhibit variable range hopping at low temperatures and show temperature dependent ferromagnetism, which can be explained by bound magnetic polarons mechanism. For the metallic films, the carrier densities play a crucial role in their robust ferromagnetism and the resistivity and magnetization are independent of temperature; the carrier-mediated exchange mechanism has been suggested as responsible for magnetic ordering in these metallic films. Optical absorption and magneto-optic studies of (In1-xFex)2O3 films indicate further differences between metallic and semiconducting films and show significant magnetic circular dichroism below the In2O3 bandedge at room temperature, which also implies intrinsic ferromagnetism. [ABSTRACT FROM AUTHOR]