The invention discloses an etching plaster for metal and metal oxide transparent conducting layers and an etching process, in the invention, lagging production processes, such as the use of organic solvents, strong acid etching and strong alkaline cleaning and the like, are not used any longer, instead, the etching plaster and the etching process which do not pollute the environment are used. The etching plaster comprises the following components in parts by weight: 0.1-20 parts of salt substance, 2-50 parts of non-volatile acid, 10-30 parts of aqueous high molecular polymer, 0.1-10 parts of dilute wetting dispersant, 0.1-5 parts of defoamer, 10-40 parts of thickening agent, 0.1-10 parts of bacteriostat and 2-30 parts of water. The invention simplifies the process flow, cancels acid and alkali soaking and the use of organic solvents, lowers the environmental protection cost, improves the etching quality of products, and has the effects of high efficiency, energy saving and environmental protection. The invention is widely applied to the fields of electron, semiconductors, fine chemistry industry and the like.