A reduced size non-volatile memory cell array is achieved by forming first trenches in an insulation layer in the row direction, filling the first trenches with insulation material, forming second trenches in the insulation layer in the column direction, forming the STI isolation material in the second trenches, and forming the source regions through the first trenches. Alternately, the STI isolation regions can be made continuous, and the source diffusion implant has sufficient energy to form continuous source line diffusions that each extend across the active regions and under the STI isolation regions. This allows control gates of adjacent memory cell pairs to be formed closer together.