A trench isolation region (32) is fabricated to include a trench liner (28) comprised of aluminum nitride. The aluminum nitride trench liner is useful in borderless contact applications wherein a contact opening (56) is etched in an interlayer dielectric (54) and overlies both an active region. (e.g. doped region 52) and the trench isolation region. During formation of opening using etch chemistry which is selective to aluminum nitride, the trench liner protects a P-N junction at a corner region (58) of the trench to prevent exposing the junction. By protecting the junction, subsequent formation of a conductive plug (60) will not electrically short circuit the junction, and will keep diode leakage to within acceptable levels.