Abstract: Provided is a method of manufacturing a semiconductor device having an n-type FET and a p-type EFT each formed over a semiconductor substrate, which comprises (a) forming, over the n-type FET and p-type FET, a first insulating film for generating a tensile stress in the channel formation region of the n-type FET so as to cover gate electrodes of the FETs, while covering, with an insulating film, a semiconductor region between the gate electrode of the p-type FET and an element isolation region of the semiconductor substrate; (b) selectively removing the first insulating film from the upper surface of the p-type FET by etching; (c) forming, over the n-type and p-type FETs, a second insulating film for generating a compressive stress in the channel formation region of the p-type FET so as to cover the gate electrodes of the FETs; and (d) selectively removing the second insulating film from the upper surface of the n-type FET.