Transmission electron microscopy (TEM) is carried out to characterize the extended defect reduction in low-defect nonplanar GaN substrate templates grown by lateral epitaxial overgrowth (LEO). The LEO nonplanar GaN substrate template has a trapezoidal cross section with smooth (0 0 0 1) and {1 1 2 2} facets. We demonstrate here the dislocation distribution and behavior in both ordinary LEO and two-step LEO. Penetration of threading dislocations (TDs) beyond mask windows is observed in ordinary LEO Substrates. In two-step LEO substrates, which utilize the tendency for TDs to bend 90 at certain plane interfaces, only a type dislocations with Burgers vector b = (3)/(1) < 1 1 2 0 > are generated in the upper part above the TD bending zone between two mask windows with a density of similar to 8 x 10(7)cm(-2), and there are almost no dislocations in the LEO wing region. This approach provides a promising path to produce low-defect GaN substrate templates for high-performance buried heterostructure lasers. (c) 2006 Elsevier B.V. All rights reserved.