Monolayer group-III monochalcogenides (MX, M = Ga, In; X = S, Se, Te), an emerging category of two-dimensional (2D) semiconductors, hold great promise for electronics, optoelectronics and catalysts. By first-principles calculations, we show that the phonon dispersion and Raman spectra, as well as the electronic and topological properties of monolayer MX can be tuned by oxygen functionalization. Chemisorption of oxygen atoms on one side or both sides of the MX sheet narrows or even closes the band gap, enlarges work function, and significantly reduces the carrier effective mass. More excitingly, InS, InSe, and InTe monolayers with double-side oxygen functionalization are 2D topological insulators with sizeable bulk gap up to 0.21 eV. Their lowenergy bands near the Fermi level are dominated by the p x and p y orbitals of atoms, allowing band engineering via in-plane strains. Our studies provide viable strategy for realizing quantum spin Hall effect in monolayer group-III monochalcogenides at room temperature, and utilizing these novel 2D materials for high-speed and dissipationless transport devices.