The fundamental resolution limit and depth of focus of immersion lithography are described. The image contrasts for TE polarization, TM polarization, and unpolarized condition are explored in detail. There are complications associated with diffraction orders incident on the resist at large incident angles. Image contrast can be improved or degraded depending on the choice of polarization states. The influence of polarization on processing windows for 65 and 45 nm 1:1 line/space patterns is studied by simulation. It shows the use of vector image lithography simulator to quantify exposure-focus processing window improvements for TE polarization as compared with TM polarization. The results show that the full resolution capabilities of immersion lithography systems can only be realized when the polarization control is used.