A semiconductor device and manufacturing method thereof capable of improving an operating speed of a MOSFET using an inexpensive structure. The method comprises the steps of forming a stress film to cover a source, drain, sidewall insulating layer and gate of the MOSFET and forming in the stress film a slit extending from the stress film surface toward the sidewall insulating layer. As a result, an effect of allowing local stress components in the stress films on the source and the drain to be relaxed by local stress components in the stress film on the gate is suppressed by the slit.