Evidence is presented for phase separation inIn0.27Ga0.73N/GaNmultiple quantum wells. After annealing for 40 h at a temperature of 950 °C, the absorption threshold at 2.95 eV is replaced by a broad peak at 2.65 eV. This peak is attributed to the formation of In-rich InGaN phases in the active region. X-ray diffraction measurements show a shift in the diffraction peaks toward GaN, consistent with the formation of an In-poor phase. A diffraction peak corresponding to an In-rich phase is also present in the annealed material. Nanoscale In-rich InGaN precipitates are observed by transmission electron microscopy and energy dispersive x-ray chemical analysis. ©1998 American Institute of Physics.