A method of forming a p-type compound semiconductor layer includes increasing a temperature of a substrate loaded into a reaction chamber to a first temperature. A source gas of a Group III element, a source gas of a p-type impurity, and a source gas of nitrogen containing hydrogen are supplied into the reaction chamber to grow the p-type compound semiconductor layer. Then, the supply of the source gas of the Group III element and the source gas of the p-type impurity is stopped and the temperature of the substrate is lowered to a second temperature. The supply of the source gas of nitrogen containing hydrogen is stopped and drawn out at the second temperature, and the temperature of the substrate is lowered to room temperature using a cooling gas. Accordingly, hydrogen is prevented from bonding to the p-type impurity in the p-type compound semiconductor layer.