Laser-diode heterostructures of InGaAlN containing a third-order diffraction grating for distributed optical feedback have been examined with transmission electron microscopy (TEM) and scanning electron microscopy (SEM). The grating was defined holographically and etched by chemically assisted ion-beam etching into the upper GaN confinement layer of the laser structure. After the etch step, it was overgrown with anAl0.08Ga0.92Nupper cladding layer. Threading dislocations were present that initiated at the sapphire substrate, but no new dislocations were observed at thegrating/Al0.08Ga0.92Ninterface. A comparison of TEM and SEM micrographs reveals that there is a compositional gradient in the AlGaN upper cladding layer; however, calculations show that it did not reduce the optical coupling coefficient of the grating. ©1998 American Institute of Physics.