An integrated circuit device and method for manufacturing the integrated circuit device is disclosed. The disclosed method provides a processing for forming improved source/drain features in the semiconductor device. Semiconductor devices with the improved source/drain features may prevent or reduce defects and achieve high strain effect resulting from epi layers. In an embodiment, the source/drain features comprises a second portion surrounding a first portion, and a third portion between the second portion and the semiconductor substrate, wherein the second portion has a composition different from the first and third portions.