A semiconductor structure includes a source/drain (S/D) feature disposed in a semiconductor layer, a metal gate stack (MG) disposed in a first interlayer dielectric (ILD) layer and adjacent to the S/D feature, a second ILD layer disposed over the MG, and an S/D contact disposed over the S/D feature. The semiconductor structure further includes an air gap disposed between a sidewall of a bottom portion of the S/D contact and the first ILD layer, where a sidewall of a top portion of the S/D contact is in direct contact with the second ILD layer.