We investigate the effect of the MgO substrate on the growth of GaN by molecular beam epitaxy with radio frequency plasma source. MgO substrate is advantageous for its closer lattice constant to GaN. However, epitaxial GaN layer grown on MgO (1 1 1) substrate is often inclined about 2 degrees toward a particular a-axis of the GaN. This inclination is found to be caused by the domain structure of the MgO substrates. On the tilted domains of the substrate, the strain is effectively relaxed through the inclination. Another difficulty of MgO substrate is the diffusion of Mg atoms into the GaN layer. This Mg diffusion from the MgO substrate has successfully been suppressed by introducing the thin low-temperature grown AlN buffer layer. The AlN buffer also improves the crystalline quality of the GaN layer. (C) 2009 Elsevier B.V. All rights reserved.