The strain relaxation in In0.25Ga0.75As and In0.4Ga0.6As grown on GaAs substrates at low temperature has been studied before and after laterally oxidizing an underlying Al0.98Ga0.02As layer. The relaxation as a function of layer thickness has been measured by cross-sectional transmission electron microscopy and x-ray analysis. It is found that oxidation of the Al0.98Ga0.02As layer improves the relaxation of the strained InxGa1-xAs layer. Moreover, the interfacial misfit dislocations have been removed, and the threading dislocation density has decreased approximately by one order of magnitude after oxidation. © 2000 American Institute of Physics.