The effect of thermal annealing on the composition and morphology of the surface of strained SiGe layers grown on Si is investigated in the temperature range 400–900 °C. We show that Ge segregation starts at 400 °C and increases with increasing temperature. Above 700 °C, strain relaxation leads to the formation of islands on the surface. By combining atomic force microscopy and Auger electron spectroscopy we demonstrate that these islands are Ge rich and that at 900 °C rather pure Ge islands are formed on a Si rich underlying layer.