Provided is a package structure including a bottom die, a top die, an insulating layer, a circuit substrate, a dam structure, and an underfill. The top die is bonded on a front side of the bottom die. The insulating layer is disposed on the front side of the bottom die to laterally encapsulate a sidewall of the top die. The circuit substrate is bonded on a back side of the bottom die through a plurality of connectors. The dam structure is disposed between the circuit substrate and the back side of the bottom die, and connected to the back side of the bottom die. The underfill laterally encapsulates the connectors and the dam structure. The dam structure is electrically isolated from the circuit substrate by the underfill. A method of forming the package structure is also provided.