We study the evolved stellar population of the Local Group galaxy IC10, with the aim of characterizing the individual sources observed and to derive global information on the galaxy, primarily the star-formation history and the dust production rate. To this aim, we use evolutionary sequences of low- and intermediate-mass (M < 8 M_{⊙}) stars, evolved through the asymptotic giant branch phase, with the inclusion of the description of dust formation. We also use models of higher mass stars. From the analysis of the distribution of stars in the observational planes obtained with infrared bands, we find that the reddening and distance of IC10 are E(B - V) = 1.85 mag and d = 0.77 Mpc, respectively. The evolved stellar population is dominated by carbon stars that account for 40{ per cent} of the sources brighter than the tip of the red giant branch. Most of these stars descend from {˜ } 1.1-1.3 M_{⊙} progenitors, formed during the major epoch of star formation, which occurred ˜2.5 Gyr ago. The presence of a significant number of bright stars indicates that IC10 has been the site of significant star formation in recent epochs and currently hosts a group of massive stars in the core helium-burning phase. Dust production in this galaxy is largely dominated by carbon stars; the overall dust production rate estimated is 7× 10^{-6} M_{⊙} yr-1.