A method of manufacturing a semiconductor device provides a semiconductor device with a gallium-nitride-based semiconductor structure that allows long-term stable operation without degradation in device performance. After formation of an insulation film on a surface other than on a ridge surface, an oxygen-containing gas such as O2, O3, NO, N2O, or NO2 is supplied to oxidize a p-type GaN contact layer from the surface and to thereby form an oxide film on the surface of the p-type GaN contact layer. Then, a p-type electrode that establishes contact with the p-type GaN contact layer is formed by evaporation or sputtering on the oxide film and on the insulation film. Heat treatment is subsequently performed at temperatures between 400 and 700° C. in an atmosphere containing a nitrogen-containing gas such as N2 or NH3 or an inert gas such as Ar or He.