A method and system for forming a nitrided germanium-containing layer by plasma processing. The method includes providing a germanium-containing substrate in a process chamber, generating a plasma from a process gas containing N.sub.2 and a noble gas, where the plasma conditions are selected effective to form plasma excited N.sub.2 species while controlling formation of plasma excited N species, and exposing the substrate to the plasma to form a nitrided germanium-containing layer on the substrate. A method is also provided that includes exposing a germanium-containing dielectric layer to liquid or gaseous H.sub.2O to alter the thickness and chemical composition of the layer.