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In this context, a simple, nontoxic, and eco‐friendly fully water‐induced (WI) route to fabricate ternary ZrGdO_x thin films at various annealing temperatures is reported. Annealing temperature dependent microstructure, morphology, optical, electrical properties, and chemical bonding states of the WI ZrGdO_x thin films are investigated by x‐ray diffraction, atomic force microscopy, optical spectroscopy, x‐ray photoelectron spectroscopy, and electrical measurements. A low leakage current density of 10⁻⁸ A cm⁻² at 1 mV cm⁻¹ and a large areal capacitance of 531 nF cm⁻² at 20 Hz are observed for 400 °C‐annealed ZrGdO_x thin films. To verify the possible applications of ZrGdO_x thin films as the gate dielectric in thin‐film transistors (TFTs), WI In₂O₃/ZrGdO_x TFTs are integrated. 250 °C‐derived full oxide In₂O₃/ZrGdO_x TFTs have demonstrated high electrical performance and low operating voltage, including high µ_FE of …