In this paper, we give two new characterizations of separable inner quasidiagonal C*-algebras. Based on these characterizations, we show that a unital full free product of two inner quasidiagonal C*-algebras is itself inner quasidiagonal. As an application, we show that a unital full free product of two inner quasidiagonal C*-algebras with amalgamation over a full matrix algebra is inner quasidiagonal. Meanwhile, we conclude that a unital full free product of two AF algebras with amalgamation over a finite-dimensional C*-algebra is inner quasidiagonal if there are faithful tracial states on each of these two AF algebras such that the restrictions of these states to the common subalgebra coincide.