Intrinsic stress evolution during the growth of GaN by metal-organic chemical-vapor deposition on (111) Si, using an AlN buffer layer, was monitored in situ with a multiple-beam optical stress sensor. Data show that stress evolution takes place in two stages: an initial compressive regime up to about 100nm in thickness followed by a transition to a constant tensile stress, ∼0.3GPa, in films up to 1μm thick. Correlation of the stress evolution with surface morphological evolution by sequential atomic force microscopy images clearly shows that the incremental stress remains compressive in spite of grain coalescence, which is generally considered to be the dominant source of tensile stress in GaN films on sapphire. Rather, the most dominant feature accompanying the transition in stress from compressive to tensile, which takes place after grain coalescence, is an increase in the lateral size of individual islands. It is shown that this incremental tensile stress accompanied by an increase in lateral grain size can be accounted for by the annihilation of free volume associated with the grain boundaries. On samples cooled to room temperature, surface cracks mainly on the (1010) planes are observed to have channeled in films thicker than 250nm. Analysis of cracking using the theory of brittle fracture, using the measured growth stress profile and value for the critical thickness, yields a thermal-expansion mismatch stress off 1.1GPa for GaN films deposited at 1100°C and cooled to room temperature.