In this study, we developed an a-InGaZnO (a-IGZO) thin film transistor (TFT) structure that inserts a sputtered AlOx intermediate layer (IL) within the active layer. The IL not only effectively blocks hydrogen (H) diffusion from the gate insulation (GI) layer to the upper region of a-IGZO but also modifies the energy band structure of the bottom channel region and creates a locally low electron concentration that counteracts the excess electron donated by diffused H. Compared to conventional TFTs, the TFT with the IL exhibits impressive electrical characteristics, including a high saturation mobility (μsat) of 14.5 cm2 V−1 s−1, an on/off current ratio (Ion/Ioff) of 6.2 × 108, and a low subthreshold swing (SS) of 0.16 V/dec. Furthermore, this structure exhibits remarkable stability under negative bias stress and negative bias illumination stress, with ΔVth values of 1.1 and 1.5 V, respectively. The integration of the IL provides a promising approach for enhancing the performance of a-IGZO TFTs, paving the way for next-generation display technologies.