We analyzed the stress in semiconductor devices manufactured by the 0.25-μm process. This analysis used a finite-element-method, in which we took stress-dependent oxidation into account, to make clear the mechanism of sharpening the upper corner of the isolation structure during thermal oxidation. The corner sharpening occurs because oxidation is suppressed under high compressive stress, which occurs because expansion of newly grown oxide around the upper corner is prevented. To eliminate the sharpening, the oxidation-induced stress must be lowered by controlling the initial shape of the upper corner before oxidation. Further more, because the higher oxidation temperature reduces the stress in the newly grown oxide, it is possible to increase the roundness of upper corner by increasing the oxidation temperature.