A method for forming a field effect transistor device employs a self-aligned etching of a semiconductor substrate to form a recessed channel region in conjunction with a pair of raised source/drain regions. The method also provides for forming and thermally annealing the pair of source/drain regions prior to forming a pair of lightly doped extension regions within the field effect transistor device. In accord with the foregoing features, the field effect transistor device is fabricated with enhanced performance.