Investigations of heavily doped 4H-SiC single crystals grown by physical vapor transport show that already a few percent of nitrogen in the argon atmosphere result in one order of magnitude higher values of nitrogen chemically incorporated in the crystals compared to the usual background level. At our growth conditions the crystals seem to be saturated with nitrogen at a concentration of about 4 x 10(19) cm(-3). The chemical nitrogen concentration generally exceeds the net donor concentration. In the photoluminescence spectra of oxidised wafers measured at room temperature the intensity of the dominating bandgap emission (394 nm) decreases whereas the intensity of a band at about 500 nm increases with increasing nitrogen concentration above 2 x 10(19) cm(-3). At that concentration also the wafer warp starts to enhance. For these samples, scanning electron microscopy combined with cathodoluminescence indicates a strongly enhanced planar defect formation. Furthermore, their appearance can be correlated to the strong anisotropy of the resistivity measured by Hall effect which is only found for heavily nitrogen-doped substrates after thermal treatment. The heavy doping seems to be a necessary but not sufficient precondition for the formation of planar defects. Investigations of oxidised as well as of argon-annealed PVT layers have demonstrated that an additional thermal treatment is required. The distribution of the planar defects on {10 (1) over bar0} cleavage planes is discussed. (C) 2003 Elsevier B.V. All rights reserved.