The demand for high-resolution displays with fine pitch has been continuously increased. Source/drain (S/D) dry etching is indispensable when defining very narrow patterns, but back-channel damage is inevitable when it is carried out, which can lead to deterioration in the performance of devices made with them. Nevertheless, thorough analysis on the etch damage was not yet conducted in depth. In this study, the phenomenon and the reason of etch damage occurring in S/D dry etch procedure of back-channel-etched oxide thin-film transistors were evaluated. Right after S/D dry etching process, small amount of molybdenum (S/D metal) and chlorine (main etching gas) were detected on the back-channel surface. The changes in the chemical bonding state of the back-channel surface and the resulting degradation of device performance were examined in detail. Furthermore, a highly efficient wet treatment method was introduced to restore the etch damage. By doing so, all of the device characteristics were notably enhanced compared to a device not subjected to the wet treatment process.