Embodiments of the present invention provide an improved shallow trench isolation structure and method of fabrication. The shallow trench isolation cavity includes an upper region having a sigma cavity shape, and a lower region having a substantially rectangular cross-section. The lower region is filled with a first material having good gap fill properties. The sigma cavity is filled with a second material having good stress-inducing properties. In some embodiments, source/drain stressor cavities may be eliminated, with the stress provided by the shallow trench isolation structure. In other embodiments, the stress from the shallow trench isolation structure may be used to complement or counteract stress from a source/drain stressor region of an adjacent transistor. This enables precise tuning of channel stress to achieve a desired carrier mobility for a transistor.