To provide a miniaturized transistor having favorable electric characteristics. An oxide semiconductor layer is formed to cover a source electrode layer and a drain electrode layer, and then regions of the oxide semiconductor layer which overlap with the source electrode layer and the drain electrode layer are removed by polishing. Precise processing can be performed accurately because an etching step using a resist mask is not performed in the step of removing the regions of the oxide semiconductor layer overlapping with the source electrode layer and the drain electrode layer. Further, a sidewall layer having conductivity is provided on a side surface of a gate electrode layer in a channel length direction; thus, the sidewall layer having conductivity overlaps with the source electrode layer or the drain electrode layer with a gate insulating layer provided therebetween, and a transistor substantially including an Lov region is provided.