High density plasma etching of indium zinc oxide (IZO) thin films was performed in HBr/Ar gas mix. As HBr concentration increased, the etch rate was decreased and etch profile was improved. The high degree of etch anisotropy was achieved with decreasing dc-bias voltage and increasing gas pressure. The formation of protective layer, which had a strong effect on the etch profile, was confirmed by surface analyses. The X-ray photoelectron spectroscopy revealed the formation of InBr3 and ZnBr2 compounds. It could be concluded that the etching of IZO films in HBr/Ar plasma was governed by ion sputtering along with chemical assistance.