We have studied the optical and structural properties of InAs/GaAs QDs covered by InxGa1-xAs (0 less than or equal to x less than or equal to 0.3) layer using transmission electron microscopy, photoluminescence (PL) spectra and atomic force microscopy. We find that the strain reduces in the growth direction of InAs islands covered by InGaAs instead of GaAs layer. Significant redshift of PL peak energy and narrowing of PL linewidth are observed for the InAs QDs covered by 3 nm thick InGaAs layer. In addition, atomic force microscopy measurements indicate that the InGaAs islands will nucleate on top of InAs quantum dots, when 3 nm In0.3Ga0.7As overgrowth layer is deposited. This result can well explain the PL intensify degradation and linewidth increment of quantum dots with a higher In-mole-fraction InGaAs layer. The energy gap change of InAs QDs covered by InGaAs may be explained in terms of reducing strain, suppressing compositional mixing and increasing island height. (C) 2000 Elsevier Science B.V. All rights reserved.