A semiconductor device having favorable electric characteristics and a manufacturing method thereof are provided. A transistor includes an oxide semiconductor layer formed over an insulating layer, a source electrode layer and a drain electrode layer which overlap with part of the oxide semiconductor layer, a gate insulating layer in contact with part of the oxide semiconductor layer, and a gate electrode layer over the gate insulating layer. In the transistor, a buffer layer having n-type conductivity is formed between the source electrode layer and the oxide semiconductor layer and between the drain electrode layer and the oxide semiconductor layer. Thus, parasitic resistance is reduced, resulting in improvement of on-state characteristics of the transistor.