A method of fabricating a semiconductor device includes providing a region having doped silicon region on a substrate, and forming a silicon germanium material adjacent to the region on the substrate. A stressed silicon nitride layer is formed over at least a portion of the doped silicon region on the substrate. The silicon germanium layer and stressed silicon nitride layer induce a stress in the doped silicon region of the substrate. In one version, the semiconductor device has a transistor with source and drain regions having the silicon germanium material, and the doped silicon region forms a channel that is configured to conduct charge between the source and drain regions. The stressed silicon nitride layer is formed over at least a portion of the channel, and can be a tensile or compressively stressed layer according the desired device characteristics.