The embodiment of the invention discloses an LED chip and a manufacturing method thereof, the LED chip comprises a chip substrate, an epitaxial structure, a P-type electrode, an N-type electrode and an insulating layer, the epitaxial structure comprises a first P-type layer, a first active layer and a first N-type layer, the first N-type layer comprises a first N-type sub-layer and a second N-type sub-layer, the active layer and the first N-type sub-layer expose part of the surface of the P-type layer, and the first N-type sub-layer and the second N-type sub-layer expose part of the surface of the P-type layer. The second N-type sub-layer is located on the surface of the first N-type sub-layer, the N-type electrode is located on the side, away from the surface of the chip substrate, of the second N-type sub-layer and covers the second N-type sub-layer, and the insulating layer covers the part, except the surface of the P-type electrode and the surface of the N-type electrode, of the surface of the LED chip. Therefore, the N-type electrode covers the second sub-N-type layer, the second sub-N-type layer can be prevented from being exposed, and the insulating layer wraps the uncovered parts of the first sub-N-type layer and the second sub-N-type layer, so that electrochemical reaction between the N-type layer and water vapor in the environment can be inhibited.