Hysteresis in the current-voltage characteristics is one of the major obstacles to the implementation of organic thin-film transistors in large-area integrated circuits. The hysteresis has been correlated either extrinsically to various charge-trapping/transfer mechanisms arising from gate dielectrics or surrounding ambience or intrinsically to the polaron-bipolaron reaction in low-mobility conjugated polymer thin-film transistors. However, a comprehensive understanding essential for developing viable solutions to eliminate hysteresis is yet to be established. By embedding carbon nanotubes in the polymer-based conduction channel of various lengths, here we show that the bipolaron formation/recombination combined with the H2O/O2 electrochemical reaction is responsible for the hysteresis in organic thin-film transistors. The bipolaron-induced hysteresis is a thermally activated process with an apparent activation energy of 0.29 eV for the bipolaron dissociation. This finding leads to a hysteresis model that is generally valid for thin-film transistors with both band transport and hopping conduction in semiconducting thin films.