A method for forming a semiconductor device includes providing a semiconductor substrate; forming a gate dielectric over the semiconductor substrate; forming a gate electrode over the gate dielectric; forming an insulating layer over a sidewall of the gate electrode; defining source and drain regions in the semiconductor substrate adjacent to the insulating layer; implanting a dopant in the source and drain regions of the semiconductor substrate to form doped source and drain regions; forming a sidewall spacer adjacent to the insulating layer; forming a recess in the semiconductor substrate in the source and drain regions, wherein the recess extends directly underneath the spacer a predetermined distance from a channel regions; and forming a stressor material in the recess. The method allows the stressor material to be formed closer to a channel region, thus improving carrier mobility in the channel while not degrading short channel effects.