Indium-tin-zinc-oxide (ITZO) as the channel layer grown by co-sputtering of ZnO target and ITO target in the bottom gate thin-film transistors (TFTs) is proposed in this work. The microstructure and optical properties of ITZO thin films at different annealing temperatures were analyzed. The impact of various annealing temperatures on the ITZO TFT performance characteristics was systematically investigated as well. It was found that ITZO TFT with annealing temperature of 300 °C exhibits excellent electrical performance with a high saturation field-effect mobility (μ_sat) of 27.4 cm² V⁻¹ s⁻¹, a low threshold voltage (V_th) of −0.64 V, a small subthreshold swing (SS) value of 0.23 V per decade, and the high on-off current ratio (I_on/I_off) of 1.8 × 10⁷. In addition, it also shows good output curves including gate control capabilities and good electrode contact as well as extreme atmospheric stability. As shown by photoluminescence (PL) analysis and X-ray photoelectron spectroscopy (XPS) analysis, the beneficial effects of various annealing temperatures on device performance are attributed to the reorganization of the amorphous network and the control of defect chemistry in the films. The correlation between the post-deposition thermal treatment and the characteristics of a transistor was investigated and excellent performance of the transistor was demonstrated.