The authors report on the growth, structure, and emission properties of AlGaN double heterostructures having a graded-index-separate-confinement-heterostructure design. These devices were grown on the Si-face of 6H-SiC substrates by plasma-assisted molecular-beam epitaxy. The active region of the device consists of 75-nm thick Al0.72Ga0.28N film, confined by two 50-nm thick compositionally graded AlxGa1-xN films (x = 1–0.8 and x = 0.8–1) and two AlN cladding layers. X-ray diffraction and transmission electron microscopy provide evidence that the compositionally graded AlGaN layer may also be serving as a strain transition buffer, by blocking threading defects in the vicinity of the AlN/AlGaN heterointerface. Polarization dependent photoluminescence studies indicate that the emission from these structures at 257 nm is transverse magnetic polarized. Simulation studies indicate that the vertical confinement of the optical mode in these structures is 32.5% and simulations of the band structure indicate the formation of a p-n junction resulting from polarization-induced doping. Electron-beam pumping of these structures provides evidence of the onset of stimulated emission at room temperature.