A method has been provided for etching adjoining layers of indium tin oxide (ITO) and silicon in a single, continuous dry etching process. A conventional dry etching gas, such as HI, is used to etch ITO using RF or plasma energy. When the silicon layer underlying the ITO layer is reached, oxygen or nitrogen is added to etching gas to improve the selectivity of ITO to silicon. In some aspects of the invention an etch-stop layer is formed in the silicon layer. A specific example of fabricating a bottom gate thin film transistor (TFT) is also provided where adjoining layers of source metal, ITO, and channel silicon are etched in the same dry etch step.