A higher quality and a nearly stoichometric composition of Cd1-yZnyTe (y = 0.04) epilayers have been successfully grown on a GaAs substrate by hot-wall epitaxy (HWE). The growth conditions regarding preheating treatment and Cd reservoir temperature were optimized. The relationship between quality and thickness was examined by four-crystal X-ray rocking curves and the best value of 120 arcsec for full width at half maximum (FWHM) was obtained. The dislocations on the interface, generated from the difference in lattice constants, were directly observed by high-resolution electron microscopy (HREM). The variation of strain with epilayer thickness shows that the density of extended defects in the epilayer decreases rapidly increasing the thickness up to 5 mum. When the epilayer thickness reaches 20 mum, the strain almost becomes zero. This result suggests that the high-quality epilayer, same as the bulk crystal, can be obtained by increasing the thickness. Photoluminescence (PL) spectra at 4.2 K show that bound-exciton (BE) emission is dominative. The strain relaxation by misfit dislocations were also explored by HREM. (C) 2002 Elsevier Science B.V. All rights reserved.