In this paper, we report extensive study of Ti-salicide performed to meet the requirements of deep submicron devices such as high temperature stability, low resistivity, junction leakage current, and compatibility with current processing steps. We have found that oxygen induced local agglomeration of Ti-salicide causes degradation of sheet resistance and leakage current under high temperature annealing. We have examined the nucleation and growth of Ti-salicide on polysilicon and active region with and without screen oxide. We found that sample without screen oxide shows uniform morphology al the polysilicon and silicon surface. The local agglomeration of Ti-salicide can be explained by oxygen knock-in effect. It is known that oxygen can be incorporated during lightly doped drain (LDD) ion implantation. Due to this oxygen, the electrical characteristics of Ti-salicide are significantly degraded. Compared with control sample, sheet resistance and junction leakage of Ti-salicide junction with screen oxide are significantly higher. This behavior can be explained by local agglomeration induced Shottky junction behavior.