A semiconductor device capable of selectively applying different stresses for increasing current drivability of PMOS transistor is made by defining trenches in a semiconductor substrate having a PMOS region; forming selectively a buffer layer on sidewalls of the trenches; forming an insulation layer to fill the trenches; annealing the semiconductor substrate such that compressive stress is applied in a channel length direction of a PMOS transistor by oxidizing the buffer layer; removing portions of the insulation layer and thereby forming an isolation layer; and forming the PMOS transistor on the PMOS region of the semiconductor substrate.