The first-principles study of Ni-doped InN has been carried out to explore the doping effect of various charge states of Ni on the structural, electronic, magnetic, and optical properties of InN using generalized gradient approximation. Structural properties like lattice parameters, aspect ratios, bond lengths, and formation energies of (In, Ni) N are used to determine the stability of each doped system. The formation energies of (In, Ni)N systems decrease with the increase in charge state of nickel, while the bond lengths show an opposite trend. The DOS diagram shows that the introduction of Ni-d states within the bang gap region reduces the band gap for Ni1+- and Ni2+-doped InN, while the isolated states are generated in the case of Ni3+- and Ni4+-doped systems. The Ni1+-, Ni3+-, and Ni4+-doped InN systems are ferromagnetic in nature, whereas the (In, Ni2+)N depicts spin-glass-like behavior. The best possible magnetization is obtained for (In, Ni4+)N with a total magnet moment of 2.42 mu(B) per supercell. Because of the presence of nickel impurities, the optical properties of InN have been significantly improved. The pure and Ni3+- and Ni4+-doped InN systems show nearly the same values of absorption edges (similar to 0.56 eV), in contrast with the Ni1+- and Ni2+-doped systems, where these values are 0.37 and 0.51 eV, respectively. The shift in absorption edges of Ni1+- and Ni2+-doped InN to lower energies and increase in the intensity of absorption and broadening of absorption peaks can be attributed to the pronounced band-gap reduction for these systems. A negligible shift of absorption edges in the case of Ni3+- and Ni4+- doped InN is the characteristic of isolated charge states introduced around the Fermi level, which inhibit the band gap reduction, and hence the optical properties are not improved as expected. This study demonstrates an important fact that for best possible optical device applications Ni1+-doped InN system is excellent, while for better magnetic properties the (In, Ni4+)N is more suitable.