Abstract This research presents a combined experimental-modeling study of lattice rotations and deviatoric strain gradients induced by focused-ion beam (FIB) milling in nitride heterostructures. 3D X-ray polychromatic microdiffraction (PXM) is used to map the local lattice orientation distribution in FIB-structured areas. Results are discussed in connection with microphotoluminescence (μ-PL), fluorescent analysis, scanning electron microscopy (SEM) and transmission electron microscopy (TEM) data. It is demonstrated that FIB-milling causes both direct and indirect damage to the InGaN/GaN layers. In films subjected to direct ion beam impact, a narrow amorphidized top layer is formed. Near the milling area, FIB-induced stress relaxation and formation of complicated 3D strain fields are observed. The resulting lattice orientation changes are found to correlate with a decrease and/or loss of PL intensity, and agree well with finite element simulations of the three-dimensional strain fields near the relaxed trenches. Experimentally, it is found that the lattice surface normal has an in-plane rotation, which only appears in simulations when the GaN-substrate lattice mismatch annihilates the InGaN-substrate mismatch. This behavior further supports the notion that the film/substrate interface is incoherent.