This paper presents a study of the transformation of high-temperature AlN (HT-AlN) interlayer (IL) and its effect on the strain relaxation of Al0.25Ga0.75N/HT-AlN/GaN. The HT-AlN IL capped with Al0.25Ga0.75N transforms into AlGaN IL in which the Al composition increases with the HT-AlN IL thickness while the total Ga content keeps nearly constant. During the HT-AlN IL growth on GaN, the tensile stress is relieved through the formation of V trenches. The filling up of the V trenches by the subsequent Al0.25Ga0.75N growth is identified as the Ga source for the IL transformation, whose effect is very different from a direct growth of HT-AlGaN IL. The a-type dislocations generated during the advancement of V trenches and their filling up propagate into the Al0.25Ga0.75N overlayer. The a-type dislocation density increases dramatically with the IL thickness, which greatly enhances the strain relaxation of Al0.25Ga0.75N. (c) 2008 American Institute of Physics.