Highly efficient luminescence at room temperature is achieved from a novel CdTe(thickness less than or equal to 2 ML)/ZnSe fractional monolayer heterostructures (FMS) grown by atomic layer epitaxy. Various optical spectroscopic methods such as, photoluminescence (PL), PL-excitation, spatially-resolved PL and temperature-dependent PL are used to investigate the origin of the luminescence. Structural inhomogeneities such as alloying and thickness fluctuation affect the line width and line shape of luminescence, also the luminescence intensity is greatly enhanced,by the localization of excitons at disorder induced localized states. The radiative recombination mechanism is explained in terms of a simple model which includes localized states originating from the inhomogeneity of CdTe FMS. (C) 2003 Elsevier Science B.V. All rights reserved.