VO2 undergoes a sharp metal-insulator transition at ∼67 °C with several orders of change in conductivity and optical transmittance. Understanding and control of the properties of vanadium oxide layers grown on technologically relevant substrates such as Si (100) single crystals is therefore of great interest. In this work, we show tunability of metal-insulator transition temperature as well as recoverable stress in VO2 thin films grown on Si substrate by introducing nanoscale atomic layer deposited HfO2 interfacial layers with no degradation in the resistance ratio. For a confined VO2 film, the metal-insulator transition temperature is suppressed by ∼16 °C and the recoverable stress is 150 MPa, compared to 400 MPa for a bare film. These observations are further correlated with in situ variable temperature measurement of stress changes occurring during the phase transition. Structural and microstructural studies on the various samples have been carried out by x ray diffraction and cross-sectional transmission electron microscopy. The strategy of tuning the metal-insulator transition characteristics by nanoscale interfacial dielectrics is of broader relevance in design of programmable materials and integration into solid state devices for electronics.