A readout circuit of a touch panel is provided. The readout circuit includes a charge modulator and a correlated double sampling demodulator. The charge modulator is configured to provide a driving current to charge or discharge a sensing electrode of the touch panel and generate a sensing voltage signal. The correlated double sampling demodulator is coupled to the charge modulator. The correlated double sampling demodulator is configured to sample the sensing voltage signal to obtain a voltage variation when a touch event happens. A method for driving the touch panel is also provided.