High-resolution transmission electron microscopy has been used to study formation of interfacial defects related to misfit strain accommodation in Ge/Si heterostructures (mismatch 4%) grown in the two-dimensional mode. Special emphasis is placed on the conditions leading to a two-dimensional (layer-by-layer) growth mode. We discuss general features of a dislocation tangle resulted from glide-limited plastic relaxation, typical for highly mismatched (001)-diamond and zinc-blende heterostructures. The evolution of the dislocation network as a function of film thickness and thermal annealing is controlled by growth instabilities and dislocation interactions. The observed correlation in distribution of parallel misfit dislocations including pairing (at <2 nm) of misfit segments from intersecting glide planes and rearrangements in a nonequilibrium dislocation network driven by elastic interaction between 60° dislocation segments in the almost relaxed heterostructures are discussed in detail. Pairing of the 60° glide dislocations results either in their combination to form pure edge 90° dislocations or in the dissociation into partials. We propose and experimentally verify a model for the latter process involving the formation of extrinsic stacking faults in the heterolayers under compressive strain.