The formation of granule-like balls on the surface of indium-tin oxide (ITO) films induced by atomic hydrogen (H-) treatment in plasma-enhanced chemical vapor deposition (PECVD) and hot-wire chemical vapor deposition (HW-CVD) tools is reported in this paper. The ball formation on the film surface is responsible for the reduction in optical transmittance and electrical conductivity of ITO films. The X-ray diffraction patterns have revealed that the H-treated ITO surfaces are composed of complicated compounds, including metallic indium, indium tin oxides, and indium hydroxides. Anger electron spectroscopy has shown that the balls are rich in indium atoms and areas outside the balls are rich in oxygen atoms. Finally, we have shown that by capping the ITO surface with a PECVD silicon oxide thin film, the degradation of ITO films can be completely prevented.