The optical and structural properties of AlGaN active regions containing nanoscale compositional inhomogeneities (NCI) grown on low dislocation density bulk AlN substrates are reported. These substrates are found to improve the internal quantum efficiency and structural quality of NCI-AlGaN active regions for high Al content alloys, as well as the interfaces of the NCI with the surrounding wider bandgap matrix, as manifested in the absence of any significant long decay component of the low temperature radiative lifetime, which is well characterized by a single exponential photoluminescence decay with a 330 ps time constant. However, room temperature results indicate that non-radiative recombination associated with the high point defect density becomes a limiting factor in these films even at low dislocation densities for larger AlN mole fractions. Published by Elsevier Ltd.