Si:C epitaxy was investigated to increase the substitutional carbon concentration, to achieve selectivity, and to understand growth characteristics on different Si crystallographic planes. A defective microstructure was observed next to the recess sidewalls. It was found that Si:C epitaxial growth on (110) crystallographic plane is heavily defective while the same epitaxy on (100) plane shows defect- free microstructure. By process optimization and using the appropriate chemistries for deposition and etch steps, we have developed a selective Si:C epitaxy process which result in a defect-free epitaxial layer that fills a 60 nm deep recessed area with 1.5 % substitutional [C] with 100 % substitutionality, and 100 % selectivity on dielectrics. Also, thermal stability of the substitutional [C] in Si:C epitaxy was tested with spike annealing at 1050 oC. No loss of substitutional [C] was observed after the spike annealing from a Si:C film with 100 % carbon substitutionality.