A phase-shifting photomask with a self aligned undercut rim-shifting element and methods for its manufacture are provided. One embodiment of the invention provides a method of manufacturing a phase-shifting photomask having a self aligned rim-shifting element, the method comprising: applying a patterning film to a first portion of a transparent substrate; etching the substrate to a depth to remove a second portion of the substrate not beneath the patterning film; etching the first portion of the substrate to undercut an area beneath the patterning film; and removing the patterning film, wherein the etched substrate forms a self-aligned undercut rim-shifting element.