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Scanning tunneling microscopy (STM) and spectroscopy and electron energy loss spectroscopy were used to characterize ultrathin epitaxial aluminum oxide on Ag(111) which was prepared via a specific deposition and oxidation process. Atomically resolved STM images show self-organized oxide stripes of 4 nm width with excellent homogeneity in depth and chemical composition properties which are crucial for applications of this oxide to magnetic tunnel junctions. We also found that electrons tunnel easily through the oxide film. This oxide has a different spectroscopic signature from that of alumina and has a wide bandgap close to 6.6 eV.