The seeded-heteroepitaxial growth, morphology and electrical transport properties of InN overlayers deposited by reactive magnetron sputtering on AIN-nucleated (00.1) sapphire have been investigated. For comparison, InN films were grown directly onto (00.1) sapphire under identical experimental conditions. These unseeded films showed a unimodal growth and were a mixture of textured and broadly heteroepitaxial grains. Low Hall mobility and carrier concentration and high resistivity were typical. In contrast, the AIN-nucleated InN overlayers exhibited a bimodal growth, strongly heteroepitaxial grains, and high Hall mobility. A particularly interesting aspect of the films grown on seeded (00.1) sapphire is the preservation of electrical continuity and high Hall mobility even in the limit of InN overlayers with thicknesses only on the order of 20–40Å.