Degradation of In2O3-Ga2O3-ZnO (IGZO) thin-film transistors (TFTs)) was studied. We evaluated degradation caused by applying gate voltage and drain voltage stress. A parallel shift of the transfer curve was observed under gate voltage stress. Joule heating caused by the drain current was observed. We tried to reproduce this degradation of the transfer curve change by device simulation. When we assumed the trap level as the density of state (DOS) model and increased two kinds of trap density, we obtained properties that show the same trends as the experimental results. We concluded that two degradation mechanisms occur under gate and drain voltage stress conditions. And then, we tried to improve the TFT characteristics using high pressure water vapor (HPV) annealing. We also found that the cooling conditions after HPV annealing affect the IGZO TFT characteristics.