Orientation-patterned GaAs templates and AlxGa1-x As waveguides were grown using molecular beam epitaxy technique for nonlinear optical wavelength converters applications and tested by second harmonic generation of 1.56 mum input beam. Current template design leads to waveguide core corrugation, and high transmission loss. An improved template fabrication process is proposed to eliminate template-induced corrugation. Initial growth and processing results show that high-quality template surfaces can be obtained, essential for the waveguide re-growth over the GaAs template. (C) 2003 Elsevier Science B.V. All rights reserved.