Epitaxial growth of smooth and high purity AlxGa1-x As layer is fundamentally more difficult than that of GaAs because of complex growth kinetics, small surface migration rate of Al, high reactivity of Al with residual oxygen and other impurities in the growth system, and surface segregation of impurities in AlGaAs. In this article, these issues are briefly reviewed and methods are suggested to improve the bulk and interfacial properties of AlGaAs/GaAs heterostructures. Ambient oxygen, if present, in AlGaAs affects both the bulk and the interfacial properties of the AlGaAs/GaAs heterostructures. As well as forming non-radiative recombination centers in GaAs and AlGaAs, O tends to accumulate at the GaAs/AlGaAs inverted (GaAs on AlGaAs) heterointerfaces even when GaAs is just one monolayer thick. Furthermore, the Si doping suppresses and Be doping favors incorporation of O in AlGaAs without any contribution from the Be source itself. Incorporation of O and other impurities reduces, and the quality of AlGaAs/GaAs heterointerfaces improves if the (100) GaAs substrates are misoriented towards [111]A. On the off-axis substrates, we have observed a marked improvement in the performance of GaAs and InGaAs strained quantum well edge emitting lasers, and heterojunction bipolar transistors (HBTs). In HBTs, there is a significant reduction in current and geometry dependence of current gain, and a detailed analysis revealed a reduction in surface, space charge and bulk recombination components of base current.