A semiconductor structure with a MISFET and a HEMT region includes a first III-V compound layer. A second III-V compound layer is disposed on the first III-V compound layer and is different from the first III-V compound layer in composition. A third III-V compound layer is disposed on the second III-V compound layer is different from the second III-V compound layer in composition. A source feature and a drain feature are disposed in each of the MISFET and HEMT regions on the third III-V compound layer. A gate electrode is disposed over the second III-V compound layer between the source feature and the drain feature. A gate dielectric layer is disposed under the gate electrode in the MISFET region but above the top surface of the third III-V compound layer.