A new phenomenon of highly localized, nanoscale oxidation of silicon-containing layers has been observed. The localized oxidation enhancement observed in both Si and Si(3)N(4) layers appears to be catalyzed by the migration of Ge quantum dots (QDs). The sizes, morphology, and distribution of the Ge QDs are influenced by the oxidation of the Si-bearing layers. A two-step mechanism of dissolution of Si within the Ge QDs prior to oxidation is proposed.