Inspired by the ongoing development of multifunctional and hybrid nanomaterials for spintronics application, the structural, electronic and magnetic properties of FeSn co-doped In2O3 nanoparticles have been studied. Effects of Sn as a tetravalent impurity in In1.96−xFe0.04Snx O nanoparticles on the room temperature ferromagnetism (RTFM) are investigated. Small concentration of Sn leads to an initially abrupt decrease in the magnetic moment from 0.78 emu g−1 (for x = 0) to 0.37 emu g−1 for (x = 0.005) beyond which it decreases gradually in a tunable manner to 0.23 emu gm−1 (for x = 0.025). The Sn-induced suppression of the ferromagnetic moment is attributed to the appearance of mixed valent states Fe2+/Fe3+ and depletion of itinerant carriers from the system with the increase in Sn content. Additionally, Sn as an electron dopant plays a pivotal role to diminish the ferromagnetic stability in this system by destabilising the formation of local-bound magnetic polaron.