A method of manufacturing a semiconductor device having: forming a hetero semiconductor layer on at least the major surface of the semiconductor substrate body of a first conductivity type; etching the hetero semiconductor layer selectively by use of a mask layer having openings in way that the hetero semiconductor layer remains to be not etched with a predetermined thickness; oxidizing an exposed parts of the hetero semiconductor layer; forming the hetero semiconductor region by etching a oxidized film formed in the oxidizing; and forming the gate insulating film in a way that the gate insulating film makes an intimate contact with the hetero semiconductor region and the semiconductor substrate body. The bandgap of the hetero semiconductor layer is different from that of the semiconductor substrate body. The gate electrode is arranged in a junction part between the hetero semiconductor region and the semiconductor substrate body with the gate insulating film interposed between the gate electrode and the junction part.