A non-volatile memory device and fabrication method thereof are provided. A floating region is formed on an active region on a substrate. Trenches define the active region. The floating region is made of an ONO layer. A gate electrode is formed on the floating region. A mask is formed on the gate electrode. A thermal oxidation is performed to make a sidewall oxide and a trench oxide on the sidewall of the gate electrode and the trench, respectively. As a result, the widths of the gate electrode and the active region become less than the width of the floating region, thereby forming protrusions at ends of the floating region. Isolation regions are formed in the trenches and include the sidewall oxide and the trench oxide. The isolation regions surround the protrusions. As a result, electric field induced on the sidewall of the floating region is decreased. Moreover, the thermal oxidation cures any damage to the sidewalls of the floating region. Accordingly, leakage current can be substantially suppressed at the boundary region between the isolation region and the floating region.