A light emitting diode package includes a substrate with a first metal layer, a second metal layer and an insulating layer between the first metal layer and the second metal layer. A cavity is defined in the insulating layer and the second metal layer. The second metal layer surrounding the cavity is divided into a first conductive portion and a second conductive portion. An LED chip is positioned inside the cavity and on an upper surface of the first metal layer. The LED chip has two electrodes electrically connected to the first conductive portion and the second conductive portion respectively. The cavity is filled with an encapsulation to cover the LED chip. A method for manufacturing the LED package is also disclosed.