Indium-tin oxide (ITO) coatings on polymer film substrates should have the required properties already in their as-deposited state and should be chemically and thermally stable. The coatings can be produced either by reactive DC-magnetron sputtering of In/Sn (e.g., 80/20, wt.%) metallic alloy targets or by pseudo-reactive sputtering of ITO (In2O3SnO2 90/10, wt%) targets. In the former process (and to a lesser extent in the latter process), a surface instability of the target arises : black crystals of a dark phase grow on the target surface, changing the target voltage and causing pronounced arcing in the plasma. This harmful phenomenon grows worse during a sputter run and finally necessitates abortion of the run and mechanical cleaning of the target. This phenomenon has never been explained in literature. In this paper, it will be shown that the black crystals are In2O and that they originate from an equilibrium reaction at the target surface in which In2O3 is decomposed into In2O and O-2. This reaction is especially annoying with reactive processes in which optical plasma emission monitoring (PEM) is used as a control means to obtain the correct stoichiometry of the coatings at relatively high sputter deposition rates.