It has been demonstrated that mixing atomic-layer deposition subcycles of aluminum oxide (Al2O3) and aluminum fluoride (AlF3) at an optimal ratio yields an aluminum oxyfluoride (AlOxFy) compound with virtually no internal defects. By systematically analyzing the defect structures formed in AlOxFy thin films as a function of the Al2O3 to AlF3 subcycle ratio, the optimal composition was identified. Because hydrogen migrates either through intrinsic defects in the film or via repeated bonding and dissociation with oxygen, a defect-free AlOxFy film in which AlF3 sublayers providing no hydrogen-diffusion pathways are periodically repeated represents an exceptionally effective hydrogen barrier. The barrier performance of AlOxFy was experimentally validated for indium-gallium-zinc oxide (IGZO) thin-film transistors (TFTs). During thermal annealing, the fluorine (F) from the AlOxFy film diffuses into the IGZO layer, further enhancing its resistance to hydrogen-related degradation. Even in IGZO TFTs incorporating a silicon nitride dielectric with a high hydrogen content, the introduction of an AlOxFy barrier effectively suppresses hydrogen-induced threshold voltage (Vth) shifts. In addition, the F doping induced by the AlOxFy layer conferred extra stability, maintaining minimal Vth variation even under prolonged positive-bias stress and negative-bias stress. This work identified a defect-free AlOxFy thin film as a highly effective hydrogen diffusion barrier and demonstrated its capability to significantly improve the hydrogen stability of IGZO TFTs. The enhancement in hydrogen tolerance is attributed not only to the superior barrier properties of AlOxFy but also to the beneficial F-doping effect imparted to the IGZO channel layer.