A novel-channel MOS transistor with a silicon-germanium (SiGe) heterostructure embedded beneath the channel and silicon-carbon source/drain (Si:C S/D) stressors was demonstrated. The additional SiGe structure couples additional strain from the S/D stressors to the overlying Si channel, leading to enhanced strain effects in the channel region. We termed the SiGe region a strain-transfer structure due to its role in enhancing the transfer of strain from lattice-mismatched S/D stressors to the channel region. Numerical simulations were performed using the finite-element method to explain the strain-transfer mechanism. A significant drive current IDSAT improvement of 40% was achieved over the unstrained control devices, which is predominantly due to the strain-induced mobility enhancement. In addition, the impact of scaling the device design parameters on transistor drive current performance was investigated. Guidelines on further performance optimization in such a new device structure are provided.