As integrated circuits (IC) have become more complicated with device features shrinking into the deep sub-micron range, so the challenge of defect isolation has become more difficult. Many failure analysis (FA) techniques using optical/electron beam and scanning probe microscopy (SPM) have been developed to improve the capability of defect isolation. SPM provides topographic imaging coupled with a variety of material characterization information such as thermal, magnetic, electric, capacitance, resistance and current with nano-meter scale resolution. Conductive atomic force microscopy (C-AFM) has been widely used for electrical characterization of dielectric film and gate oxide integrity (GOI). In this work, C-AFM has been successfully employed to isolate defects in the contact level and to discriminate various contact types. The current mapping of C-AFM has the potential to identify micro-leaky contacts better than voltage contrast (VC) imaging in SEM. It also provides I/V information that is helpful to diagnose the failure mechanism by comparing I/V curves of different contact types. C-AFM is able to localize faulty contacts with pico-amp current range and to characterize failure with nano-meter scale lateral resolution. C-AFM should become an important technique for IC fault localization. FA examples of this technique will be discussed in the article.