A touch display device and a formation method thereof are provided. The touch display device includes a touch panel disposed on a first surface of a substrate of a display panel. A color filter layer is disposed on a second surface of the substrate. The touch panel includes a plurality of first and second conductive patterns arranged by two directions that are perpendicular to each other. A patterned isolation layer, having a first portion and a second portion, is formed over the first surface of the substrate, wherein the first portion is disposed at the intersection of the first and the second conductive patterns, and the second portion is disposed between the first and the second conductive patterns. The first portion has a height that is lower than a height of the second portion.