A transistor includes a silicon germanium channel layer formed on a portion of a single crystalline silicon substrate. The silicon germanium channel layer includes a Si—H bond and/or a Ge—H bond at an inner portion or an upper surface portion thereof. A PMOS transistor is provided on the silicon germanium channel layer. A silicon nitride layer is provided on surface portions of the single crystalline silicon substrate, the silicon germanium channel layer and the PMOS transistor for applying a tensile stress. The MOS transistor shows good operating characteristics.