We have studied strained InGaAs quantum wells with GaAlAs barriers, grown by molecular beam epitaxy, varying In content and well thickness. Photoluminescence measurements were made at 12 K. The appearance of a characteristic additional exciton‐like photoluminescence peak indicates the transition between elastically strained and relaxed layers. This transition was also observed by the occurrence of misfit dislocations in the corresponding transmission electron microsope (TEM) images. Layer thicknesses and In content were also determined by TEM. The results give a critical layer thickness of 29±0.5 nm at an In content of 32±2%. This value lies about a factor of 3–4 above the critical layer thickness calculated by Matthews and Blakeslee [J. Cryst. Growth27, 118 (1974)].