The influence of He implantation and annealing on the relaxation of Si0.7Ge0.3 layers on Si (100) substrates is investigated. Proper choice of the implantation energy results in a narrow defect band ≈100 nm underneath the substrate/epilayer interface. During annealing at 700–1000 °C, He-filled bubbles are created, which act as sources for misfit dislocations. Efficient annihilation of the threading dislocations is theoretically predicted, if a certain He bubble density with respect to the buffer layer thickness is maintained. The variation of the implantation dose and the annealing conditions changes density and size of spherical He bubbles, resulting in characteristic differences of the dislocation structure. Si1-xGex layers with Ge fractions up to 30 at. % relax the initial strain by 70% at an implantation dose of 2×1016 cm-2 and an annealing temperature as low as 850 °C. Simultaneously, a low threading dislocation density of 107 cm-2 is achieved. The strain relaxation mechanism in the presence of He filled bubbles is discussed. © 2002 American Institute of Physics.