A novel semiconductor device and a driving method thereof are provided. In the semiconductor device, a (volatile) node which holds data that is rewritten by arithmetic processing as appropriate and a node in which the data is stored are electrically connected through a source and a drain of a transistor whose channel is formed in an oxide semiconductor layer. The off-state current value of the transistor is extremely low. Therefore, electric charge scarcely leaks through the transistor from the latter node, and thus data can be held in the latter node even in a period during which supply of power source voltage is stopped. In the semiconductor device, a means of setting the potential of the latter node to a predetermined potential is provided. Specifically, a means of supplying a potential corresponding to “1” or “0” that is data stored in the latter node from the former node is provided.