Insitusurface sensitive photoemission spectroscopy has been used to study the evolution of the strained layer GaAs/In0.52Al0.48As heterostructure as the GaAs overlayer is grown past the critical layer thickness in sequential steps by molecular‐beam epitaxy. The variation in spectral features evident in the GaAs valence band is inconsistent with predictions of tight binding theory for strain relaxation. An analysis of the core level spectra suggests that In out‐diffusion is responsible for the valence band modification.