A package structure and method for forming the same are provided. The package structure includes a semiconductor die formed over a first side of an interconnect structure, and the semiconductor die has a first height. The package structure also includes a first stacked die package structure formed over the first side of the interconnect structure, and the first stacked die package structure has a second height. The second height is greater than the first height. The package structure includes a lid structure formed over the semiconductor die and the first stacked die package structure. The lid includes a main portion and a protruding portion extending from the main portion, and the protruding portion is directly over the semiconductor die.