Mechanisms for the nucleation of oxidation‐induced stacking faults in silicon have been examined. Fault nucleation is found to occur at sites of mechanical damage and at impurity inhomogeneities in the silicon. In either case, nucleation occurs by the coalescence of excess interstitials into Frank loops surrounded by dislocations of the type (a/3)(111). Nucleation in damage‐free crystals occurs along a banded or striated distribution. This is identical to the distribution of shallow noncrystallographic etch pits in the unoxidized wafer which have been linked to vacancy‐oxygen complexes. The common distribution pattern indicates that the impurity inhomogeneities are nucleation sites for fault formation. Models for the nucleation phenomenon are proposed based upon local excess oxygen diffusion into regions of excess vacancy concentration in the crystals.