Disclosed are a self-aligned thin film transistor capable of simultaneously improving an operation speed and stability and minimizing a size thereof by forming source and drain electrodes so as to be self-aligned, and a fabrication method thereof. The method of fabricating a thin film transistor according to an exemplary embodiment of the present disclosure includes: forming an active layer, a gate insulator, and a gate layer on a substrate; forming a photoresist layer pattern for defining a shape of a gate electrode on the gate layer; etching the gate layer, the gate insulator, and the active layer by using the photoresist layer pattern; depositing a source and drain layer on the etched substrate by a deposition method having directionality; and forming a gate electrode and self-aligned source electrode and drain electrode by removing the photoresist layer pattern.