A compound semiconductor device having mesa-shaped element region, and excellent characteristics are provided. The compound semiconductor device has: an InP substrate; an epitaxial lamination mesa formed above the InP substrate and including a channel layer, a carrier supply layer above the channel layer and a contact cap layer above the carrier supply layer; ohmic source electrode and drain electrode formed on the cap layer; a recess formed by removing the cap layer between the source and drain electrodes, and exposing the carrier supply layer; an insulating film formed on the cap layer and retracted from an edge of the cap layer away from the recess; a gate electrode extending from the carrier supply layer in the recess to outside of the mesa; and air gap formed by removing side portion of the channel layer facing the gate electrode outside the mesa.