It is desirable to reduce chip area, lower on resistance and improve electric current driving capacity of a DMOS transistor in a semiconductor device with a DMOS transistor. On the surface of an N type epitaxial layer, a P+W layer of the opposite conductivity type (P type) is disposed and a DMOS transistor is formed in the P+W layer. The epitaxial layer and a drain region are insulated by the P+W layer. Therefore, it is possible to form both the DMOS transistor and other device element in a single confined region surrounded by an isolation layer. An N type FN layer is disposed on the surface region of the P+W layer beneath the gate electrode. An N+D layer, which is adjacent to the edge of the gate electrode of the drain layer side, is also formed. P type impurity layers (a P+D layer and a FP layer), which are located below the drain layer, are disposed beneath the contact region of the drain layer.