The present invention relates to a semiconductor device including a thin film transistor comprising a microcrystalline semiconductor which forms a channel formation region and includes an acceptor impurity element, and to a manufacturing method thereof. A gate electrode, a gate insulating film formed over the gate electrode, a first semiconductor layer which is formed over the gate insulating film and is formed of a microcrystalline semiconductor, a second semiconductor layer which is formed over the first semiconductor layer and includes an amorphous semiconductor, and a source region and a drain region which are formed over the second semiconductor layer are provided in the thin film transistor. A channel is formed in the first semiconductor layer when the thin film transistor is placed in an on state.