4H-SiC homoepitaxial layers were grown on on-axis (0 0 0 1) C-face substrates at an inclination of 0.5degrees or less by horizontal hot wall chemical vapor deposition. After H-2 etching, the surface morphology of the on-axis (0 0 0 1) C-face substrate showed a straight step structure that had the same height as a 4H-SiC lattice constant along the c-axis. Specular surface morphology of a wide area of up to 80% of a 2-in wafer was obtained at a low C/Si ratio of 0.6. It was found that that appearance of basal plane dislocations on the epitaxial layer surface can be prevented by using an on-axis substrate. Ni/4H-SiC Schottky barrier diodes fabricated on the epitaxial layer at 1 x 10(16) cm(-3) showed a high breakdown voltage of up to 1 kV and low leakage current. (C) 2004 Elsevier B.V. All rights reserved.