Direct evidence for interplanar relaxation in islands at the initial stages of strained epitaxy is presented using molecular beam epitaxically deposited In0.5Ga0.5As on GaAs(100). Concomitant existence of atomic displacements in the substrates to unexpectedly large depths of ∼150 A˚ is found. In incoherent islands, defects are found to be introduced symmetrically near the island edges.