The invention discloses an LED chip and a manufacturing method thereof. The LED chip includes a substrate, an epitaxial structure, a first transparent conductive layer, a current blocking layer, a second transparent conductive layer, a P electrode, and an N electrode. The epitaxial structure, which is arranged on the substrate, includes an N-type semiconductor layer, a quantum well light emitting layer and a P-type semiconductor layer arranged in sequence. The epitaxial structure has a groove in a preset region, and the groove is used to expose part of the N-type semiconductor layer. The P-type semiconductor layer has a first region, a second region and a third region. The first transparent conductive layer covers the first region. The current blocking layer covers the second region and one part of the first transparent conductive layer. The second transparent conductive layer covers the other part of the first transparent conductive layer, the third region and one part of the current blocking layer. The P electrode covers the other part of the current blocking layer. The N electrode is arranged in the groove and electrically connected with the N-type semiconductor layer. Through the technical scheme, the problem that the current in an LED chip diffuses unevenly is solved. The light emission uniformity of the LED chip is improved.