Array substrates for use in TFT-LCDs and fabrication methods thereof. A transparent conductive layer, a first metal layer, a first insulating layer, a semiconductor layer, a second insulating layer and a sacrificial layer are sequentially formed on a substrate. With a first photomask, a photoresist layer with various thicknesses is formed on part of the sacrificial layer. Using the photoresist layer as an etching mask, a gate line having a gate, a channel layer on the gate, a gate pad at the end portion of the gate line, a pixel electrode and a source pad are defined. An insulating spacer is formed on the sidewalls of the gate and gate line. With a second photomask, a source line, source and drain are formed. The source pad connects the end portion of the source line. An array substrate is thus obtained with only two photomasks.