Nanocrystalline NiO thin films have been grown on different substrates by RF magnetron sputtering with mixed O-2-Ar plasma composition. The oxygen content of the plasma was varied between 0 and 100 %. The films were characterized by scanning electron microscopy (SEM), X-ray diffraction (XRD), X-ray photoelectron spectroscopy (XPS), and extended X-ray absorption fine structure (EXAFS). SEM results reveal a grain refinement when oxygen is added to the plasma. This effect can also be observed by XRD, where an analysis of the peak width confirms this decrease in the grain size. The analysis of EXAFS data shows that the presence of O-2 in the plasma induces lattice disorder, as evidenced by the observed increase of the Debye-Waller factor. These microstructural changes modify the electronic structure of the NiO thin films. The spectral line shape in Ni 2p XPS spectra shows clear differences between samples grown with and without O-2 in the plasma. These differences can be explained in terms of the observed structural changes.