We have investigated the nature of epitaxy, defects (dislocations, stacking faults, and inversion domains), and heterointerfaces in zinc oxide films grown on (0001) sapphire and explored the possibility of using it as a buffer layer for growing group III nitrides. High quality epitaxial ZnO films were grown on sapphire using pulsed laser deposition in the temperature range 750-800 degrees C. The epitaxial relationship of the film with respect to (0001) sapphire was found to be (0001)(ZnO)parallel to(0001)(sap), with in-plane orientation relationship of [01 (1) over bar 0](ZnO)parallel to[(1) over bar 2 (1) over bar 0](sap). This in-plane orientation relationship corresponds to a 30 degrees rotation of ZnO basal planes with respect to the sapphire substrate, which is similar to the epitaxial growth characteristics of AlN and GaN on sapphire. The threading dislocations in ZnO were found to have mostly 1/3[11 (2) over bar 0] Burgers vectors. The planar defects (mostly I-1 stacking faults) were found to lie in the basal plane with density of about 10(5) cm-(1). We have grown epitaxial AlN films at temperatures around 770 degrees C using ZnO/sapphire heterostructure as a substrate and observed the formation of a thin reacted layer at the AlN/ZnO interface. The implications of low defect content in ZnO films compared to III-V nitrides and the role of ZnO films as a buffer layer for III-V nitrides are discussed. (C) 1998 American Institute of Physics. [S0021-8979(98)05917-9].