There is always a doubt that introducing water during oxide growing has a positive or negative effect on the properties of oxide films and devices. Herein, a comparison experiment on the condition of keeping the same oxygen atom flux in the sputtering chamber is designed to examine the influences of H 2 O on In−Sn−Zn−O (ITZO) films and their transistors. In comparison to no-water films, numerous unstable hydrogen-related defects are induced on with-water films at the as-deposited state. Paradoxically, this induction triggers an ordered enhancement in the microstructure of the films during conventional annealing, characterized by a reduction in H-related and vacancy (Vo) defects as well as an increase in film packing density and the M−O network ordering. Ultimately, the no-water thin-film transistors (TFTs) exhibit nonswitching behavior, whereas 5 sccm-water TFT demonstrates excellent electrical performance with a remarkable saturation field-effect mobility (μ FE ) of 122.10 ± 5.00 cm 2 •V −1 •s −1 , a low threshold (V th ) of −2.30 ± 0.40 V, a steep sub-threshold swing (SS) of 0.18 V•dec −1 , a high output current (I on ) of 1420 μA, and a small threshold voltage shift ΔV th of −0.77 V in the negative bias stability test (3600 s).