The transparent and conductive zinc oxide co-doped by aluminum and ytterbium (AYZO) is demonstrated. The transmittance of AYZO films in visible region only changes by less than 1% due to the stability of the suppressed oxygen vacancies. With the illuminating wavelength red-shifting up to 532 nm, the 45 nm-thick AYZO film slightly enhances its transmittance to 90% with different annealing durations. The resistivity of AYZO films reaches a minimum of 3.2 10 cm at 450 C-annealing for 15 min because the annealing process enhances the activation of ionized Yb and Al donor states in AYZO films. With the residual oxygen vacancies rigorously controlled to minimize the transmittance variation during annealing, the Yb ions added into the AYZO films contribute to the conductivity after activation but help to stabilize. Nevertheless, the annealing process for 15 min or longer duration contributes to a decreased resistivity due to the reduction of oxygen vacancy by crystalline regrowth of the AYZO films. The resistivity of AYZO films is still dominated by the oxygen-vacancy instead of the ionized Al and Yb states even after activation. With the co-doping of Yb ions, the AYZO film effectively decreases its resistivity to be a competitive candidate to substitute the ITO for a highly transparent and conductive electrode.