We studied effects of the distribution of interstitial (Ni) and substitutional nitrogen (N-s) and In/Ga interdiffusion on optical properties of the dilute nitride quantum wells (QWs) and the ways of suppressing diffusion. Without annealing, the concentration of N-i remained almost constant while N-s was linearly dependent on the total number of N. After annealing, the Ni can be removed dramatically, and interdiffusion between In and Ga was found. Inserting a thin InxdGa1-xdNydAs1-yd layer on either side of an InwqGa1-xqNyqAs1-yq QW (xq > xd) appears to suppress this interdiffusion. As a consequence, a blue shift of the photoluminescence signal after annealing remained small and the optical activity was largely improved. It was also found that a small amount of N incorporated in InGaAs QWs embedded in GaAs increased the In/Ga interdiffusion and that increased mechanical stresses enhanced the interdiffusion. (C) 2003 Elsevier Science B.V. All rights reserved.