In this paper we use first-principles full potential linearized augmented plane wave method (FP-LAPW) to inwestigate density of states (DOS), band structure and optical properties of the materials that doped with In and N. The results show that the doping structure has fine locat levels in both the spin-down direction and the spin-up direction and both state densities are symmetrical. The local levels are produced in the spin-down direction in the band gap, and co-doped compounds show being semi-metallic. The energy band structure indicates that the two co-doped compounds are still direct band gap semiconductors. The top of valence band shifts toward the low energy with the increase of the concentration of N, so obviously the band gap is widened. The main dielectric peak of imaginary part of dielectric function exists only at 8.58 eV, the position of main peak shifts to ward the right and the peak intensity increases significantly. The static dielectric constants of two different concentrations of N-doped structure also significantly increase, and a strong interaction takes place between the states of N 2p and In 5s. The number of peaks of co-doped absorption spectra reduces and the range of absorption wavelength is broadened.