The surfaces of a thermally etched GaAs substrate and a GaAs epitaxial layer grown on its substrate by molecular‐beam epitaxy have been observed for the first time using reflection high‐energy electron diffraction (RHEED) and a Nomarski contrast microscope. The surface morphology of the thermally etched GaAs substrate degraded, taking on an orange‐peel appearance, as the etching depth was increased. When a GaAs epitaxial layer with a thickness of 150 Å was grown on a thermally etched substrate, the RHEED pattern became streaked, indicating that the surface was smooth on an atomic scale. However, using a Nomarski contrast microscope, it was observed that the surface morphology of the epitaxial layer remained rough with wave longer than the optical wavelength, in the same way as the substrate. Moreover, an epitaxial layer grown on a conventionally cleaned GaAs substrate was thermally etched, and the surface was observed using RHEED, a Nomarski contrast microscope, and electron microscopy of platinum–carbon replica, in order to reveal the morphology. The morphology of the thermally etched epitaxial layer was smooth and quite different from that of the thermally etched substrate. As far as the origin of the surface degradation in the thermally etched substrate is concerned, it is believed that residual carbon contamination on the substrate surface acts as a mask, preventing the sublimation of GaAs.