A package structure including IPD and method of forming the same are provided. The package structure includes a die, an encapsulant laterally encapsulating the die, a first RDL structure disposed on the encapsulant and the die, an IPD disposed on the first RDL structure and an underfill layer. The IPD includes a substrate, a first connector on a first side of the substrate and electrically connected to the first RDL structure, a guard structure on a second side of the substrate opposite to the first side and laterally surrounding a connector region, and a second connector disposed within the connector region and electrically connected to a conductive via embedded in the substrate. The underfill layer is disposed to at least fill a space between the first side of the IPD and the first RDL structure. The underfill layer is separated from the connector region by the guard structure.