Thermal annealing at high temperatures of nonpolar (10 (1) over bar0) m-plane AlN layers directly sputtered on m-plane sapphire was investigated. The crystallinity of the layers increased with increasing annealing temperature. The full-width at half maximum of the symmetric (10 (1) over bar0) X-ray rocking curves along [0001]/[11 (2) over bar0](AlN) decreased from about 3.5/2.0 degrees to 0.24/0.19 degrees . The density of basal stacking faults of the annealed layers was found to decrease from similar to 1 x 10(5) to similar to 5 x 10(3) cm(-1) . The annealed layers had a larger optical bandgap energy than the as-sputtered layers due to their better crystallinity and structural order.