The nature of defects formed in bulk GaN:Mg crystals grown with Ga polarity was determined by means of phase images obtained by direct reconstruction of the scattered electron wave from focal series of high-resolution electron microscope images. These defects are three-dimensional Mg-rich hexagonal pyramids (or truncated pyramids) with bases on the (0 0 0 1) plane and six walls on {1 1 (2) over bar 3) planes. In projection, the cross-sections of the defects are seen as triangles (or trapezoids). The defects are decorated by Mg on their bases and all six side-walls. GaN growing inside the defect walls shows polarity inversion with respect to the matrix. Due to lower growth rate cavities are formed in the central parts of the defect. It is proposed that lateral overgrowth of the cavities restores the matrix polarity on the defect base. The change of polarity starts from the defect tip and propagates to its base, changing the stacking sequence from AB in the matrix to BC inside the defect. The exchange of Ga and N sublattices within the defect leads to a displacement of 0.6 +/- 0.2 angstrom between Ga sublattices at the boundary between the outside and inside of the defect. Appearance of these defects coincides with the saturation of hole concentration in GaN:Mg at Mg concentration at a few times 10(19) cm(-3). (c) 2005 Elsevier B.V. All rights reserved.