A source driver includes a first DAC for driving a first-color subpixel and a second DAC for driving a second-color subpixel. Each DAC is configured to output at least one output voltage according to an N-bit data code, and includes a plurality of sub-DACs, an interpolation circuit and a switch circuit. Each sub-DAC receives m bits of the N-bit data code and generates a set of intermediate voltages accordingly. The interpolation circuit performs an interpolation on a selected set of intermediate voltages according to k bits of the N-bit data code and at least one interpolation control signal, to generate the output voltage. The switch circuit electrically connects the interpolation circuit and a selected sub-DAC which outputs the selected set of intermediate voltages. The interpolation circuit of the first DAC and the interpolation circuit of the second DAC respectively perform the interpolation according to different numbers of interpolation bits.