A method for easily manufacturing a semiconductor device in which variation in thickness or disconnection of a source electrode or a drain electrode is prevented is proposed. A semiconductor device includes a semiconductor layer formed over an insulating substrate; a first insulating layer formed over the semiconductor layer; a gate electrode formed over the first insulating layer; a second insulating layer formed over the gate electrode; an opening which reaches the semiconductor layer and is formed at least in the first insulating layer and the second insulating layer; and a step portion formed at a side surface of the second insulating layer in the opening.