A pixel structure and a fabrication method thereof are provided. A substrate with a light-shielding layer and a flat layer formed thereon is provided. A first photomask process is conducted to pattern a first metal layer and a semiconductor layer for forming a source, a drain, a channel layer, a data line and a first pad. A second photomask process is conducted to pattern the protection layer, the second metal layer and the gate dielectric layer for forming a gate, a scan line and a second pad, and a part of the drain is exposed. A third photomask process is conducted to pattern a transparent conductive layer for forming a pixel electrode.