Recently, demands for magneto-optical (MO) materials with high laser-induced damage thresholds (LIDT) increased rapidly with the continuous development of high power lasers. In order to study the effect of substrate defects on LIDT of (BiTm)(3)(GaFe)(5)O-12 films, in this study, (BiTm)(3)(GaFe)(5)O-12 films without gadolinium gallium garnet (GGG) substrates and (BiTm)(3)(GaFe)(5)O-12/GGG films were prepared by liquid-phase epitaxial (LPE) and mechanical lapping and polishing method. The optical and magneto-optical properties, crystal structure, LIDT and laser-induced damage morphologies of the prepared films were investigated. Experimental results pointed out that epitaxial (BiTm)(3)(GaFe)(5)O-12 films have very high crystal and surface quality. A discontinuous defective layer with thickness of about 0-500 nm is located between GGG substrates and epitaxial films. Laser-induced damage tests and damage morphologies demonstrate that the discontinuous defective layers have an important effect on LIDT of epitaxial films, and LIDT of epitaxy films can be significantly improved by removing GGG substrates and discontinuous defective layers.