An array substrate and manufacturing method thereof and a display panel are disclosed. The manufacturing method of an array substrate includes: forming patterns of a thin film transistor, a planarization layer and a passivation layer on a base substrate, the pattern of the thin film transistor including patterns of a gate electrode, a gate insulation layer, an active layer and source and drain electrodes; patterns of the planarization layer and the passivation layer are formed by one patterning process. With the manufacturing method of the array substrate, the number of patterning processes during manufacturing of the array substrate can be decreased. Furthermore, the size of via holes in the planarization layer and the passivation layer can be decreased, thereby increasing the aperture ratio of the display device and enhancing the display effect of images.