The invention relates to a flash memory structure and a formation method thereof. The method comprises that a substrate is provided; a grid structure including a floating grid and a control grid and a had mark layer on the grid structure are formed on the substrate; a sidewall structure is formed in the sidewalls of the grid structure and the hard mask layer; an etching barrier layer covering the sidewall structure is formed; a first dielectric layer whose top is higher than the top of the floating grid and lower than the top of the hard mask layer is formed on the substrate; parts, higher than the first dielectric layer, of the sidewall structure and the etching barrier are removed; a sacrificial sidewall layer is formed in the sidewall of the hard mask layer and positioned above the sidewall structure and the etching barrier layer; a second dielectric layer is formed on the first dielectric layer; a contact hole penetrating the second and first dielectric layers is formed, and the etching rate for the second and first dielectric layers is greater than that for the sacrificial sidewall layer; and a contact hole plug is formed in the contact hole. Thus, the etching rate for the sacrificial sidewall layer is lower, the loss amount of the sacrificial sidewall layer is reduced, and the sidewall structure can be protected.