Inductively coupled plasma (ICP) oxidation has been used for low-temperature gate oxidation to reduce the trap density at the Si/SiO2 interface in polycrystalline-Si thin film transistors. Through ICP oxidation, it was found that oxygen atoms were incorporated into the Si film as an interstitial oxygen state and they were located predominantly at grain boundaries. The amount of interstitial oxygen, analyzed by energy dispersive x-ray spectroscopy, increased as the ICP oxidation time increased. With the help of the interstitial oxygen at the grain boundaries, the electron mobility of poly-Si thin film transistors was improved, indicating that ICP oxidation enabled grain-boundary passivation in addition to the previously-known trap reduction at the Si/SiO2 interface state.