A method of fabricating and a structure of an IC incorporating strained MOSFETs on separated silicon layers are disclosed. N-channel field effect transistors (nFET) and P-channel FETs (pFET) are formed on the separated silicon layers, respectively. Shallow trench insulation (STI) regions adjacent to the nFETs and pFETs thus can be formed to induce different stress to the channel regions of the respective nFETs and pFETs. As a consequence, performance of both the nFETs and the pFETs can be improved by the STI stress. In addition, the area of the IC can also be reduced as the two silicon layers are positioned vertically relative to one another.