We show that the interaction between the strain field of a surface step with uniform strain gives rise to a negative line energy of steps. The energy of a vicinal surface under compressive strain is found to be lower than the energy of the singular-crystal facet. We consider the surface of a three-dimensional strained island as a stepped surface and derive the island's energy and equilibrium shape from step energies and step-step interactions under strain. We develop a kinetic model of the island growth as the motion of atomic steps forming the island surface. Mass transport to the island top is provided by attachment of adatoms to steps from the down terraces and detachment to the up terraces.