We propose the introduction of a magnesium oxide (MgO x ) layer to reduce the temperature required for the activation of indium gallium zinc oxide (IGZO) thin films. By incorporating the MgO x layer between the IGZO channel layer and the gate insulator layer, the required activation temperature is lowered from 300 to 200 °C while enhancing the electrical performance of the IGZO thin-film transistor (TFT). Specifically, the field effect mobility is improved from 6.40 to 16.12 cm 2 /(V s), the on/off current ratio is enhanced from 1.62 × 10 9 to 7.16 × 10 9 , and subthreshold swing is enhanced from 0.48 to 0.46 V/decade. Furthermore, IGZO TFTs with the MgO x layer exhibit enhancements in threshold voltage (V TH ) shift compared to TFTs without the MgO x layer under positive bias stress (V GS = 20 V and V DS = 0.1 V for 10,000 s) and negative bias stress (V GS = −20 V and V DS = 0.1 V for 10,000 s): the V TH shifts are decreased from 2.40 to 1.72 V and from 0.56 to 0.53 V, respectively. These enhancements are verified through various analyses and are attributed to the diffusion of Mg atoms into the IGZO front channel during the low-temperature activation process, which results in the formation of Mg-doped IGZO between the MgO x and IGZO channel layers.