Defects in the near sidewall region in selective epitaxial growth of silicon have prevented its widespread use as a viable dielectric isolation technology. The main cause of these defects has been demonstrated to be thermal stress due to mismatch in the coefficient of thermal expansion between silicon and silicon dioxide. This article presents the detailed electrical characterization of these sidewall defects using P+/N junction diodes fabricated using silicon dioxide and thermally nitrided silicon dioxide as the held insulator. It is shown that the use of field oxide which was nitrided at 1100 degrees C for 60 min in ammonia gas ambient reduced the reverse saturation current density in the diodes by a factor of 6 and also improved the forward recombination and ideality factors when compared to standard thermal field oxide isolated diodes. The improvement of the sidewall quality was attributed to a reduction in thermal stress due to the modification of the coefficient of thermal expansion of nitrided silicon oxide.