An array substrate and a fabricating method thereof, and a display panel are provided. The array substrate includes a base substrate and a plurality of pixel units arranged in matrix on the base substrate, wherein, a first electrode groove and a second electrode groove separated from each other are arranged in a region of the base substrate corresponding to one of the pixel units, the first electrode groove and the second electrode groove respectively extending from an upper surface of the base substrate towards a lower surface of the base substrate; the pixel unit includes a pixel electrode and a common electrode, the pixel electrode being arranged in the first electrode groove, and the common electrode being arranged in the second electrode groove.