A semiconductor device which has higher integration and is further reduced in thickness and size. A semiconductor device with high performance and low power consumption. A semiconductor element layer separated from a substrate by using a separation layer is stacked over a semiconductor element layer formed by using another substrate and covered with a flattened inorganic insulating layer. After separation of the semiconductor element layer in a top layer from the substrate, the separation layer is removed so that an inorganic insulating film formed under the semiconductor element layer is exposed. The flattened inorganic insulating layer and the inorganic insulating film are made to be in close contact and bonded to each other. In addition, a semiconductor layer included in the semiconductor element layer is a single crystal semiconductor layer which is separated from a semiconductor substrate and transferred to a formation substrate.