•IZO–TFT was fabricated with a two-step-annealing method.•This TFT had much better uniformity and stability than that with one annealing step.•Both the shallow and deep trap states were greatly reduced by this method.In this paper, a thin-film transistor (TFT) with indium zinc oxide (IZO) channel layer was fabricated using a two-step-annealing method in which the IZO film experienced annealing steps before the etch-stopper-layer formation and after the whole device completion. The device showed better uniformity and better stability under positive bias stress, negative bias illumination stress, and temperature stress, compared to those with only one post annealing step. The calculated falling rate of the Fermi lever of the IZO channel for the two-step annealing device was as high as 0.593 eV/V, compared to 0.213 eV/V for the only-post-annealing-step one. And the corresponding density of subgap state was 4.4 × 1015 and 1.6 × 1016 eV−1 cm−3 for the device with two annealing steps and with only one post annealing step, respectively.