Incorporation of Mn into hexagonal GaN does not lead to ferromagnetic semiconductors, as predicted, but to insulating spin glass materials. Structural characterization by high-resolution transmission electron microscopy reveals that samples with Mn content below 10% are uniform ternary alloys, while in samples with higher Mn content we find Mn-rich clusters which are embedded in the (Ga,Mn)N alloy matrix. At low temperature (< 10 K) the magnetic behavior of the samples is similar showing antiferromagnetic characteristics with a spin-glass transition. However, the samples with higher Mn content additionally exhibit ferromagnetic properties even far above room temperature. This ferromagnetism originates from Mn-rich clusters in the ternary alloy. (C) 2003 American Vacuum Society.