A device includes a substrate and a gate structure wrapping around at least one vertical stack of nanostructure channels. The device includes a source/drain region abutting the gate structure, and a source/drain contact over the source/drain region. The device includes an etch stop layer laterally between the source/drain contact and the gate structure and having a first sidewall in contact with the source/drain contact, and a second sidewall opposite the first sidewall. The device includes a source/drain contact isolation structure embedded in the source/drain contact and having a third sidewall substantially coplanar with the second sidewall of the etch stop layer.