Understanding the failure mechanisms of ultrathin insulators is critical for reliably improving the device life of tunneling magnetoresistance devices, Josephson junctions, and novel molecular electrodes. The relaxation of mechanical stresses forms nanosized defects causing the failure of ultrathin similar to 2-nm alumina (Al2O3) insulators. Wafer curvature, atomic-force microscopy, and transmission-electron microscopy show that stress relaxation dramatically changed the morphology of ultrathin insulators. Time evolution of compressive stresses formed the nanohillocks, resulting in metallic shorts between two metal electrodes. The time evolution of tensile-stress relaxation fractured the insulator film to produce nanosized voids. These defects adversely affected the tunnel-barrier life and the junctions failed without the application of breakdown voltage. Deleterious effects of the stresses were mitigated by optimizing the insulator-growth methodology with a two-step process. The present work emphasizes the need to complement electrical-breakdown tests with the study of mechanical stresses and corresponding morphological changes for the comprehensive understanding of a tunnel-barrier failure mechanism. (C) 2010 American Vacuum Society. [DOI: 10.1116/1.3406143]