Attenuated phase shifting mask (att-PSM) is one of the key technologies for 130 nm and below device fabrication. We have proposed zirconium silicon oxide (ZrSiO) as a suitable material for next-generation att-PSM material. Through our optimization process both for film deposition and dry etching condition, we confirmed that we could control its phase shift and transmittance precisely. Because of its low film stress, we could neglect registration degradation. From its excellent spectral property, we can apply currently available defect inspection systems. Defect repair is easily performed by gas assisted etching. Further, we were successful to make high-transmittance material (16 %) at ArF laser source even keeping inspectability.