The characteristics of n-channel metal–oxide–semiconductor field-effect transistors (NMOSFETs) with a SiN capping layer were investigated in this study. Although the incorporation of the SiN capping layer markedly enhanced the carrier mobility and thus the drive current of the fabricated devices, the resistance to hot-carrier degradation was sacrificed, owing to the high content of hydrogen in the SiN layer that might diffuse to the channel region during the process. Even if the SiN layer was removed and the channel strain was released later, the hot-carrier degradation was severer than that in devices without SiN capping. Finally, the lateral distribution of generated interface states due to hot-carrier stress was also investigated in this study.