A method for manufacturing a thin film transistor and a display device using a small number of masks is provided. A conductive film is formed, a thin-film stack body having a pattern is formed over the conductive film, an opening portion is formed in the thin-film stack body so as to reach the conductive film, a gate electrode layer is formed by processing the conductive film using side-etching, and an insulating layer, a semiconductor layer, and a source and drain electrode layer are formed over the gate electrode layer, whereby a thin film transistor is manufactured. By provision of the opening portion, controllability of etching is improved.