Abstract: In this paper, we investigate the effect of water (H2O) molecules evolving from silicon dioxide (SiO2) film deposited by low pressure chemical vapor deposition (LPCVD) at 670°C on the transistor characteristic of an electrically erasable programmable read only memory (EEPROM) cell. Fourier Transform Infra red (FT-IR) analysis reveals that H2O is captured during film deposition and diffused to silicon surface during high thermal processing. The diffused H2O molecules lower threshold voltage (V t) of cell transistor and, thus, leakage current of the cell transistor is increased. In erased cell, V t lowering is 0.25V in which it increases leakage current of cell transistor from 1 to 100pA. This results in the lowering of high voltage margin of a 512Kb EEPROM from 2.8 to 2.6V at 85°C. [Copyright &y& Elsevier]