This paper reports the controlled growth of atomically sharp In2O3/ZnO and In2O3/Li-doped ZnO (In2O3/Li-ZnO) heterojunctions via spin-coating at 200 °C and assesses their application in n-channel thin-film transistors (TFTs). It is shown that addition of Li in ZnO leads to n-type doping and allows for the accurate tuning of its Fermi energy. In the case of In2O3/ZnO heterojunctions, presence of the n-doped ZnO layer results in an increased amount of electrons being transferred from its conduction band minimum to that of In2O3 over the interface, in a process similar to modulation doping. Electrical characterization reveals the profound impact of the presence of the n-doped ZnO layer on the charge transport properties of the isotype In2O3/Li-ZnO heterojunctions as well as on the operating characteristics of the resulting TFTs. By judicious optimization of the In2O3/Li-ZnO interface microstructure, and Li concentration, significant enhancement in both the electron mobility and TFT bias stability is demonstrated.