Photoluminescence (PL) spectroscopy, cathodoluminescence (CL) spectroscopy and imaging, and preferential defect etching and optical microscopy have been used to characterize compositionally graded Si1−xGexalloy layers grown by molecular beam epitaxy. Si1−xGexcapping layers grown on the compositionally graded layers have low threading dislocation densities, and both PL and low‐beam energy CL spectra show bound exciton luminescence features identical with those observed in bulk Si1−xGexalloys and relatively weak dislocation relatedD‐band features. Increasing the beam energy increases the relative strength of theDbands in the CL spectra, indicating that they are associated with the misfit dislocations in the compositionally graded layer. This has been confirmed by combined chemical etching and PL spectroscopy measurements. The misfit dislocations can be observed by monochromatic CL imaging at a high‐beam energy using a narrow band pass filter centerd on theD4 band.