We have extended the capability of a vector 3D lithography simulator METROPOLE-3D from a photomask simulator to become a full 3D photolithography simulator. It is designed to run moderately fast on conventional engineering workstations. METROPOLE-3D solves Maxwell's equations rigorously in three dimensions to model how non-vertically incident light is scattered and transmitted in non-planar structures. METROPOLE-3D consists of several simulation modules: photomask simulator which models the aerial image of any mask pattern (including phase-shifting masks); exposure simulator which models light intensity distribution within the photoresist and arbitrary underlying non-planar substrate structures; postexposure baking module which models the photo-active compound diffusion, chemically amplified (CA) photoresist crosslinking and de-protection processes; and finally, 3D development module which models the photoresist development process using the level-set algorithm. This simulator has a wide range of applications in studying the pressing engineering problems encountered in state-of-the-art VLSI fabrication processes. The simulator has been applied to the layout printability! manufacturability analysis to study the dominant physical phenomena in lithography, deposition, CMP and etching processes that affect the transfer of mask patterns to the final etched structures on the wafers. Using this new 3D rigorous photolithography simulator, optical proximity effects have been studied. A reflective notching problem caused by the reflective substrate structure has been thoroughly studied, and an anti-reflective coating (ARC) solution to this notching problem has been optimized by the simulations. Finally, a 3D contamination to defect transformation study was successfully performed using our rigorous simulator.