Source/drain contact spacers for improving integrated circuit device performance and methods of forming such are disclosed herein. An exemplary method includes etching an interlevel dielectric (ILD) layer to form a source/drain contact opening that exposes a contact etch stop layer (CESL) disposed over a source/drain feature, depositing a source/drain contact spacer layer that partially fills the source/drain contact opening and covers the ILD layer and the exposed CESL, and etching the source/drain contact spacer layer and the CESL to extend the source/drain contact opening to expose the source/drain feature. The etching forms source/drain contact spacers. The method further includes forming a source/drain contact to the exposed source/drain feature in the extended source/drain contact opening. The source/drain contact is formed over the source/drain contact spacers and fills the extended source/drain contact opening. A silicide feature can be formed over the exposed source/drain feature before forming the source/drain contact.