This paper presents the design, fabrication, and characterization of unique piezoresistive microfabricated shear stress sensors for direct measurements of shear stress underwater. The uniqueness of this design is in its transduction scheme which uses sidewall-implanted piezoresistors to measure lateral force (and shear stress), along with traditional top-implanted piezoresistors to detect normal forces. Aside from the oblique-implant technique, the fabrication process also includes hydrogen anneal step to smooth scalloped silicon sidewalls due to Deep Reactive Ion Etch process, which was shown to reduce 1/f noise level by almost an order of magnitude for the sidewall-implanted piezoresistors. Lateral sensitivity characterization of the sensors was done using a microfabricated silicon cantilever force sensor, while out-of-plane characterization was done using Laser Doppler Vibrometry technique. In-plane sensitivity and out-of-plane crosstalk were characterized, as well as hysteresis and repeatability of the measurements. The sensors are designed to be used underwater for various applications.