An object is to provide a method for manufacturing a thin film transistor and a display device with reduced number of masks, in which adverse effects of optical current are suppressed. A manufacturing method comprises forming a stack including, from bottom to top, a light-blocking film, a base film, a first conductive film, a first insulating film, a semiconductor film, an impurity semiconductor film, and a second conductive film; performing first etching on the whole thickness of the stack using a first resist mask formed over it; forming a gate electrode layer by side etching the first conductive film in a second etching; forming a second resist mask over the stack; and performing third etching down to the semiconductor film, and partially etching it, using the second resist mask to form a source and drain electrode layer, a source and drain region, and a semiconductor layer.