The present disclosure relates to a display panel, a manufacturing method thereof, and a display terminal. The display panel includes an interlayer insulating layer, a planarization layer, and a pixel defining layer stacked in sequence. The display panel further includes a sub-pixel, a cathode, and a thin film encapsulation structure. The pixel defining layer is provided with an opening. The sub-pixel is disposed in the opening of the pixel defining layer, and the cathode is disposed on the pixel defining layer and covers the sub-pixel. The thin film encapsulation structure is disposed on the cathode, and the thin film encapsulation structure or the cathode is provided with a first embedded portion. The first embedded portion is embedded in the pixel defining layer and the planarization layer, and is in contact with the interlayer insulating layer.