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In this study, AlN epilayers were grown by ammonia-assisted molecular beam epitaxy on 3 nm h-BN grown on c-sapphire substrates. Their structural properties were investigated by comparing as-grown and postgrowth annealed layers. The role of annealing on the crystalline quality and surface morphology was studied as a function of AlN thickness and the annealing duration and temperature. Optimum annealing conditions were identified. The results of X-ray diffraction showed that optimization of the annealing recipe led to a significant reduction in the symmetric (0 0 0 2) and skew symmetric (1 0 −1 1) reflections, which was associated with a reduction in edge and mixed threading dislocation densities (TDDs). Furthermore, the impact on the crystalline structure of AlN and its surface was studied, and the results showed a transition from a surface with high roughness to a smoother surface morphology with a significant reduction in roughness. In addition, the annealing duration was increased at 1650 °C to further understand the impact on both AlN and h-BN, and the results showed a diffusion interplay between AlN and h-BN. Finally, an AlN layer was regrown on the top of an annealed template, which led to large terraces with atomic steps and low roughness. [ABSTRACT FROM AUTHOR]