Oxide semiconductor is regarded as one of most suitable active materials of thin-film transistors (TFTs) for driving organic light-emitting diodes because of its advantages of high mobility, low-temperature processing, good electrical uniformity, visible-light transparency, and low cost. Currently oxide TFTs have been successfully applied to the backplanes of the flat-panel displays. This review gives a comprehensive understanding of the development process of oxide TFTs. In the present article, we review the major trend in the field of oxide TFTs. First, the questions of how to achieve high-mobility and high-stability oxide semiconductors are introduced, and the carrier transport mechanism is also addressed. Next, the device structures and the fabrication processes of the oxide TFTs are introduced. The electrical instability of the oxide TFTs is also discussed, which is critical for their applications in backplanes of the flat-panel displays. Especially, the mechanism of the threshold voltage instability of the oxide TFTs under negative bias illuminant stress is discussed in detail. Finally, the applications of oxide TFTs in flat-panel displays, such as active matrix organic light-emitting diodes and flexible displays, are addressed.