We have studied the phase separation and the stacking faults of InxGa1-xN grown on sapphire substrate with a GaN nucleation layer and InxGa1-xN grown on a thick GaN layer. For high In composition, the distribution of the periodic stacking faults in the InxGa1-xN grown on sapphire substrate was detected by selected area diffraction (SAD) pattern and high-resolution transmission electron microscopy (HRTEM). The periodic arrangement of stacking faults leads to the formation of split spots and the distance of split spots corresponds to the distance between stacking faults. For the InGaN layer grown on the thick GaN layer, misfit strain is relaxed by the formation of V-grooves and the random stacking faults. For the InGaN layer grown on sapphire substrate with a thin buffer layer, a higher residual strain than GaN/sapphire is found, which is relaxed by the formation of the periodic stacking faults in the InGaN layer. (C) 2000 Elsevier Science B.V. All rights reserved.