A method of forming an isolation trench in a semiconductor substrate includes the steps of sequentially depositing first and second insulating layers over the substrate, subsequently etching the second and first insulating layers to define active and non-active regions according to a patterned masking photoresist layer, excessively etching a part of the thickness of the substrate, removing parts of the first insulating layer by undercutting the sides of the non-active region so as to expose parts of the substrate in the active region, etching the substrate by using the second insulating layer as a trench patterned masking layer to form a trench in which the edges of the exposed parts of the substrate are rounded, depositing a third insulating layer on the bottom and side walls of the trench and the rounded parts of the substrate to repair the parts of the substrate damaged when forming the trench, depositing a fourth insulating layer over the second insulating layer so as to completely fill the trench, etching the fourth and second insulating layers plane until a part of the thickness of the second insulating layer is exposed so as to generate the trench isolation region, and sequentially removing the second and first insulating layers along the sides of the isolation trench.