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We have investigated the optical and structural properties of high-quality ZnO films grown on epitaxial GaN (epi-GaN) by plasma-assisted molecular-beam epitaxy employing low-temperature buffer layers. High-resolution x-ray diffraction for both symmetric and asymmetric reflexes shows that crystalline defects in ZnO films have a similarity to epi-GaN used as a substrate. The quality of ZnO epilayers grown on epi-GaN is basically determined by epi-GaN. The photoluminescence (PL) spectrum at 10 K exhibits very sharp exciton emission with a linewidth of 1.5 meV, while deep-level emission is negligible, indicative of small residual strain. At 77 K, PL is dominated by a free-exciton emission line in the low-excitation regime, while it is overtaken by a new emission band due to biexcitons at its low-energy side as the excitation intensity increases. This biexciton emission band emerges even under the intermediate excitation regime of 100 W/cm2, which is 100 times smaller than the previously reported threshold for bulk ZnO. The biexciton binding energy is estimated to be 15 meV, in agreement with previous results. At the higher excitation regime, the emission line due to exciton–exciton scattering dominates the PL spectrum. © 2000 American Institute of Physics.