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In this paper, the floating body effect (FBE) in indium-gallium-zinc-oxide (IGZO) thin-film transistor (TFT) and the mechanism of device failure caused by that are reported for the first time. If the toggle AC pulses are applied to the gate and drain simultaneously for the switching operation, the drain current of IGZO TFT increases dramatically and cannot show the on/off switching characteristics. This phenomenon was not reported before, and our study reveals that the main cause is the formation of a conductive path between the source and drain: short failure. It is attributed in part to the donor creation at the drain region during the high voltage (Vhigh) condition and in part to the donor creation at the source region during the falling edge and low voltage (Vlow) conditions. Donor creation is attributed to the peroxide formation in the IGZO layer induced by the electrons under the high lateral field. Because the donor creation features positive charges, it lowers the threshold voltage of IGZO TFT. In detail, during the Vhigh condition, the donor creation is generated by accumulated electrons with a high lateral field at the drain region. On the other hand, the floating electrons remaining at the short falling edge (i.e., FBE of the IGZO TFT) are affected by the high lateral field at the source region during the Vlow condition. As a result, the donor creation is generated at the source region. Therefore, the short failure occurs because the donor creations are generated and expanded to channel from the drain and source region as the AC stress accumulates. In summary, the FBE in IGZO TFT is reported, and its effect on the electrical characteristics of IGZO TFT (i.e., the short failure) is rigorously analyzed for the first time. [ABSTRACT FROM AUTHOR]