In a vertical dynamic memory cell, monocrystalline semiconductor material of improved quality is provided for the channel of an access transistor by lateral epitaxial growth over an insulator material (which complements the capacitor dielectric in completely surrounding the storage node except at a contact connection structure, preferably of metal, from the access transistor to the storage node electrode) and etching away a region of the lateral epitaxial growth including a location where crystal lattice dislocations are most likely to occur; both of which features serve to reduce or avoid leakage of charge from the storage node. An isolation structure can be provided in the etched region such that space is provided for connections to various portions of a memory cell array.