Transmission electron microscopy has been used to investigate the character and distribution of the microstructural features in epitaxial (001) ferroelectric PbZr0.2Ti0.8O3 films grown on (001) SrTiO3 substrates by pulsed laser deposition. The TEM observations revealed that the films were predominantly c-oriented with embedded a(1)- and a(2)-oriented domains lying on {101} planes. The substrate/film interfaces contained arrays of edge-type misfit dislocations and there were extraordinarily high densities (>> 10(10) cm(-2)) of threading dislocations in the films. The character and distribution of these features are consistent with the following relaxation sequence. Firstly, the lattice misfit between the phases is accommodated at the growth temperature by the introduction of misfit dislocations at the edges of island nuclei, and some of these dislocations are forced away from the interface to form threading segments upon island coalescence. Next, the film adopts the c-orientation upon cooling through the Curie temperature with a(1)- and a(2)-oriented domains being formed to ameliorate the self-strain of the transformation. Finally, some redistribution of the embedded domains and misfit dislocations occurs in response to stresses caused by expansion coefficient differences. The impact of these defects on the electrical and electromechanical properties of epitaxial ferroelectric properties is discussed. (c) 2006 Springer Science + Business Media, Inc.