The impact of phase defect printability on a wafer in alternating phase shift masks (alt-PSM) was investigated. The Alt-PSM is a promising resolution-enhancement technique for extending optical lithography to a finer design rule. One of the important issues in the practical use of alt-PSMs is the realization of defect-free mask manufacturing. In order to investigate the effect of phase defects on wafer printability, CD error on a wafer was evaluated using ArF exposure experiments and 3D simulations. The alt-PSM of a single-trench structure with undercut was selected. In comparison of exposure and simulation results, it is shown that the necessity for taking phase defect topography into consideration strictly in 3D simulation. From the results of the optimized simulations, allowable defect sizes of bump center and edge were 55 and 85 nm, where the phase difference was 180 degrees. The defect size of divot center and edge were 200 and 100 nm, where the phase difference was 180 degrees. Also, the present inspection sensitivities of phase defects is checked by the critical defect sizes of alt-PSM.