The band discontinuities between GaN and InN, as well as InGaN alloys, are key parameters for the design of nitride-based light emitters. Values reported to date are subject to large uncertainties due to strain effects at this highly mismatched interface. We have investigated the band lineups using first-principles calculations with explicit inclusion of strains and atomic relaxations at the interface. We find that the “natural” valence-band offset between unstrained InN and GaN is 0.3 eV. Prescriptions are given, including the band shifts, due to strains at a pseudomorphic interface. ©1997 American Institute of Physics.