Heavily Si‐doped, strain‐relaxed In0.5Ga0.5As layers are often used as contact layers on N+ GaAs to form nonalloyed ohmic contacts. The present work studies the electrical properties of such In0.5Ga0.5As layers grown on undoped GaAs buffer layers by molecular beam epitaxy both as‐grown and after anneals at temperatures between 300 and 430 °C. It is found that in the as‐grown condition, there is a region of about 150 Å extending into the In0.5Ga0.5As layer contiguous to the In0.5Ga0.5As/GaAs interface where both the electron concentration and mobility decrease toward the interface. With postgrowth anneal, the electron concentration in this region will be further reduced and the width of the region will be increased. The associated activation energy is estimated to be 0.99±0.41 eV. This phenomenon can be fully explained in terms of defect structural changes during anneal. This work provides strong evidence to indicate that the as‐grown In0.5Ga0.5As layers are not in thermodynamic equilibrium and will continue to relax when thermal energy is provided.