The semiconductor device includes a gate electrode over a substrate, a gate insulating layer over the gate electrode, an oxide semiconductor layer over the gate insulating layer, and a source electrode and a drain electrode over the oxide semiconductor layer. A length of part of an outer edge of the oxide semiconductor layer from an outer edge of the source electrode to an outer edge of the drain electrode is more than three times, preferably more than five times as long as a channel length of the semiconductor device. Further, oxygen is supplied from the gate insulating layer to the oxide semiconductor layer by heat treatment. In addition, an insulating layer is formed after the oxide semiconductor layer is selectively etched.