High-quality and nearly crack-free GaN epitaxial layer was obtained by inserting a single AlGaN interlayer between GaN epilayer and high-temperature AlN buffer layer on Si (111) substrate by metalorganic chemical vapor deposition. This paper investigates the effect of AlGaN interlayer on the structural properties of the resulting GaN epilayer. It confirms from the optical microscopy and Raman scattering spectroscopy that the AlGaN interlayer has a remarkable effect on introducing relative compressive strain to the top GaN layer and preventing the formation of cracks. X-ray diffraction and transmission electron microscopy analysis reveal that a significant reduction in both screw and edge threading dislocations is achieved in GaN epilayer by the insertion of AlGaN interlayer. The process of threading dislocation reduction in both AlGaN interlayer and GaN epilayer is demonstrated. High-quality and nearly crack-free GaN epitaxial layer was obtained by inserting a single AlGaN interlayer between GaN epilayer and high-temperature AlN buffer layer on Si (111) substrate by metalorganic chemical vapor deposition. This paper investigates the effect of AlGaN interlayer on the structural properties of the resulting GaN epilayer. It confirms from the optical microscopy and Raman scattering spectroscopy that the the AlGaN interlayer has a remarkable effect on relative relative compressive strain to the top GaN layer and preventing the formation of cracks. X-ray diffraction and transmission electron microscopy analysis reveal that a significant reduction in both screw and edge threading dislocations was achieved in GaN epilayer by the insertion of AlGaN interlayer. The process of threading dislocation reduction in both AlGaN interlayer and GaN epilayer is demonstrated.