We have successfully demonstrated an In2O3:Sn semiconductor thin‐film waveguide. The energy gap of the film can be manipulated from 3.1 eV (0.4 μm) to 3.7 eV (0.335 μm) by changing the ratio of In2O3 and SnO2. Waveguide propagation losses of 3 dB/cm for transverse magnetic (TM) and 8 dB/cm for transverse electric (TE) guided waves were experimentally confirmed at the wavelength of 632.8 nm. A phase modulator containing an indium tin oxide waveguide, two holographic mirrors, two microprisms, and two ohmic contacts were fabricated. Electro‐optic (current injection) and all‐optical modulations were conducted. A modulation depth of 18% was experimentally confirmed for the current injection device, using 15‐V applied voltage, and a modulation depth of 15% using 250 mW 355 nm UV light as the activation sources. An In2O3:Sn waveguide device working at the cutoff boundary was made. A modulation depth of 26 dB was measured with an applied voltage of 30 V. An array of applications, including use in current sensors, ozone UV sensors, attenuated total reflection (ATR) modulators, delay lines for phased array antennae, and multiquantum wells are highly feasible.