Interesting phenomena have been observed in the epitaxial lateral overgrowth of Al xGa 1-xN alloys using facet control on serrated GaN templates. A complex microstructure is observed that involves misfit dislocation arrays that are closely related to regions with significantly large variations in composition. The dislocations are on inclined planar boundaries and result from basal-plane slip, which is allowed in this inclined facet geometry. The spatial variation of the aluminum composition in the overgrowth region is determined by cathodoluminescence spectroscopy and ranges from x = 0.06 to 0.27, for constant growth conditions that after planarization result in a uniform composition at x = 0.16. These results indicate that aluminum incorporation depends significantly on the growth direction with marked preference for facets parallel to the basal plane. © 2004 American Institute of Physics.