Optical reflectance and atomic force microscopy (AFM) are used to develop a detailed description of GaN nucleation layer (NL) evolution upon annealing in ammonia and hydrogen to 1050 degreesC. For the experiments, the GaN NLs were grown to a thickness of 30 nm at 540 degreesC, and then heated to 1050 degreesC, following by holding at 1050 degreesC for additional time. As the temperature, T, is increased, the NL decomposes uniformly beginning at 850 degreesC up to 980 degreesC as observed by the decrease in the optical reflectance signal and the absence of change in the NL AFM images. Decomposition of the original NL material drives the formation of GaN nuclei on top of the NL, which begin to appear on the NL near 1000 degreesC, increasing the NL roughness. The GaN nuclei are formed by gas-phase transport of Ga atoms generated during the NL decomposition that recombine with ambient NH3. The gas-phase mechanism responsible for forming the GaN nuclei is demonstrated in two ways. First, the NL decomposition kinetics has an activation energy, E-A, of 2.7 eV and this EA is observed in the NL roughening as the GaN nuclei increase in size. Second, the power spectral density functions measured with atomic force microscopy reveal that the GaN nuclei grow via an evaporation and recondensation mechanism. Once the original NL material is fully decomposed, the GaN nuclei stop growing in size and begin to decompose. For 30 nm thick NLs used in this study, approximately 1/3 of the NL Ga atoms are reincorporated into GaN nuclei. A detailed description of the NL evolution as it is heated to high temperature is presented, along with recommendations on how to enhance or reduce the NL decomposition and nuclei formation before high T GaN growth. (C) 2004 Elsevier B.V. All rights reserved.