This study investigated the effect of N2O plasma treatment on the electrical performance and stability of In(2%)GaZnO thin-film transistors (TFTs). The experimental results showed that with increasing N2O plasma treatment time, the electrical performance of In(2%)GaZnO TFTs deteriorated, and the threshold voltage (Vth) positive shifted apparently. Moreover, the optimized In(2%)GaZnO:N2O (4 min) TFTs exhibited the best electrical performance, which are including a μFE of 22.5 cm2/Vs, a small SS value of 0.31 V/decade, a small Vth of 0.3 V, a low Dit value of 8.5×1011 cm-2/eV, and a high Ion/Ioff of 107. Moreover, a small Vth shift (0.4, 0.6, -0.5 and -0.7 V) in In(2%)GaZnO:N2O (4 min) TFT were observed under the gate bias and light illumination test. X-ray photoelectron spectroscopy and Low frequency noise analysis indicate that these enhanced performance was attributed to the appropriate N2O plasma treatment can reduce the oxygen vacancy, interface trap density and other bulk/surface defects due to the formation of metal-nitrogen bonds (especially Ga-N) and N-O bonds. Over all, the N2O plasma treatment simple method have provide a new approach to achieve high performance and highly stable oxide In(2%)GaZnO TFTs for application in flat panel displays.