Offset spacer formation for strained channel CMOS transistor

A strained channel transistor and method for forming the same, the strained channel transistor including a semiconductor substrate; a gate dielectric overlying a channel region; a gate electrode overlying the gate dielectric; source drain extension (SDE) regions and source and drain (S/D) regions; wherein a stressed dielectric portion selected from the group consisting of a pair of stressed offset spacers disposed adjacent the gate electrode and a stressed dielectric layer disposed over the gate electrode including the S/D regions is disposed to exert a strain on a channel region.