Synthesis and luminescence properties of LiInO2 nanocrystals by the sol–gel process were investigated. The products were characterized by X-ray diffraction (XRD), scanning electron microscopy (SEM), photoluminescence spectroscopy and absorption spectra. The well-crystallized tetragonal LiInO2 can be obtained by heat treatment above 600 °C from XRD. The excitation wavelengths at about 246 nm were associated with charge transfer between In and O with In3+ ions in octahedral coordination. The PL spectra excited at 246 nm have a broad and strong emission band maximum at 391 nm, corresponding to the self-activated luminescence. The optical absorption spectra of the 600 °C sample exhibited the band gap energies of 3.7 eV.