Controlling the intrinsic activity and long-term stability of active sites is essential to advance the formulation of catalysts. The hydrogenation of CO2 to methanol over indium oxide (In2O3) is believed to proceed at oxygen vacancies (VO∙∙) formed in situ. Here, we study how the structural dynamics of c-In2O3 are altered through doping with Sn or Zr, affecting the local structure, catalytic activity, and stability. We find that VO∙∙ sites in Sn-doped c-In2O3 are unreactive towards their replenishment by CO2, leading to catalyst deactivation by the formation of In0 and Sn0. Conversely, VO∙∙ sites in Zr-doped c-In2O3 show a high reactivity towards CO2, translating into a high catalytic activity and stability against over-reduction-induced deactivation. The diverging properties originate from the distinct defect dynamics in these two materials. The balance between VO∙∙ formation and its replenishment during CO2 hydrogenation is the key characteristic for both activity and stability of In2O3-based catalysts.