Molecular beam epitaxy of PbTe on BaF2(111) is studied using UHV–scanning tunneling microscopy and atomic force microscopy. It is shown that PbTe growth is totally dominated by growth spirals formed around threading dislocations (TD) that originate from the growth on the 4.2% lattice‐mismatched substrate. Due to dislocation annihilation, the TD density rapidly decreases with layer thickness, which results in a dramatic increase of the electron mobilities in the layers. ©1996 American Institute of Physics.