High-quality epitaxial InN thin films grown on (0001) sapphire with GaN buffer were characterized using transmission electron microscopy. It was found that the GaN buffer layer exhibits the (0001) Ga polarity and the InN film has In-terminated polarity. At the InN/GaN interface, there exists a high density of misfit dislocation (MD) array. Perfect edge threading dislocations (TDs) with (1/3)〈1120〉 Burgers vectors are predominant defects that penetrate the GaN and InN layers. Pure screw and mixed TDs were also observed. Overall, the TD density decreases during film growth due to annihilation and fusion. The TD density in GaN is as high as ∼1.5 × 1011 cm−2, and it drops rapidly to ∼2.2 × 1010 cm−2 in InN films. Most half-loops in GaN are connected with MD segments at the InN/GaN interface to form loops, while some TD segments threaded the interface. Half-loops were also generated during the initial stages of InN growth.