The characteristics of a semiconductor device are improved. A semiconductor device has a potential fixed layer containing a p type impurity, a channel layer, and a barrier layer, formed over a substrate, and a gate electrode arranged in a trench penetrating through the barrier layer, and reaching some point of the channel layer via a gate insulation film. Source and drain electrodes are formed on opposite sides of the gate electrode. The p type impurity-containing potential fixed layer has an inactivated region containing an inactivating element such as hydrogen between the gate and drain electrodes. Thus, while raising the p type impurity (acceptor) concentration of the potential fixed layer on the source electrode side, the p type impurity of the potential fixed layer is inactivated on the drain electrode side. This can improve the drain-side breakdown voltage while providing a removing effect of electric charges by the p type impurity.