Effects of post-annealing on electrical properties of N+ ion-implanted into indium doped ZnO (ZnO:In-N) films are investigated. p-type conduction of ZnO:In-N films with the appropriate annealing have been confirmed by Hall-effect measurements and electrical rectification behavior of homojunctions. The transmitted spectra and temperature-dependent photoluminescence (PL) spectroscopy results show that the band gap of p-type ZnO:In-N is narrow as compared to ZnO:In and the ionization acceptor energy is estimated to be 128 meV, which agrees well with our calculated transition levels $$\varepsilon \left( {0/ - 1} \right)$$ ε 0 / - 1 of InZn-2NO. X-ray photoelectron spectroscopy (XPS) spectra confirm the dominant existence of N-related acceptor defect complexes in p-type samples. Combining with transition state calculations, we find that the incorporation of In can facilitate p-type effective doping by pinning a passive impurity band above the valence band maximum (VBM) and decreasing thermal activation energy of N interstitial (Ni) in ZnO.