We demonstrate a correlation between the microstructure of epilayers and the diffusion length of free carriers and excitons in heteroepitaxial and homoepitaxial GaN films. We show that the diffusion length is shorter than predicted for a given density of dislocations. With improving structural quality of the films and lower dislocation density the diffusion lengths of free carriers and excitons increase, which, in turn, increases the rate of nonradiative recombination at dislocations. This process may explain a surprisingly small change of light emission efficiency observed for GaN epilayers with varying densities of dislocations. (C) 2003 Elsevier B.V. All rights reserved.