WO₂I₂ is a long-known member of the tungsten oxyhalide family of compounds (WO₂X₂ X = halide) that first garnered interest in the late 1960s due to its role in the chemical vapor transport of elemental tungsten in halogen lamps. Since its discovery, however, the electronic and structural properties of WO₂I₂ remain unresolved. Based on recent single crystal x-ray diffraction experiments and density functional theory (DFT) analysis, WO₂I₂ was reported to be a metal with an orthorhombic unit cell (#71: Immm). Here, we present a combination of transport, scanning tunneling spectroscopy (STS), angle-resolved photoemission spectroscopy (ARPES), and optical conductivity measurements which demonstrate that WO₂I₂ is in fact a semiconductor with a 0.5V gap, in direct contrast with the metallic DFT band structures calculated using the orthorhombic structure. Interestingly, we also observe a surface band that lies within the gap of the semiconductor. We show that this comes from the unique three-dimensional hybridization in WO₂I₂ and its modification at the surface. We will also discuss new structural refinements which suggest that WO₂I₂ has a disordered, monoclinic unit cell.