We have measured strain relaxation and islanding in Ge films grown by molecular beam epitaxy on Si(111) at substrate temperatures between 450°C and 700°C in real time with reflection high energy electron diffraction (RHEED). At 450°C, we observe an oscillation of the surface lattice parameter for the first three bilayers (BL), followed by a sharp 2D–3D growth mode transition, when transmission diffraction features appear in RHEED. The surface lattice parameter then begins to relax at an initial rate of about 0.5%/BL. The mechanisms of island growth and strain relaxation change with growth temperature. At 500°C the surface lattice parameter begins to relax after only 1BL; at 550°C relaxation begins immediately. However, 3D spots do not appear until after 3.5BL at either temperature. The initial rate of strain relaxation decreases with increasing temperature until, at 700°C (when 3D spots never appear), it is only 0.04%/BL. This behavior may be explained by a temperature-dependent roughness length scale, as well as by differences in dislocation nucleation at low and high temperatures. At low temperature, atomic force microscope images show the development of small (1000Å), faceted islands with aspect ratios (height/width) on the order of 0.07. The formation of well-defined facets is inhibited at higher temperatures. At 700°C, islands grow very large (lμm) from the outset, with aspect ratios less than 0.015. These islands cannot thicken much, because dislocations can glide in easily at their edges. The islands grow laterally quickly, and the strain in the “new” islands is not substantially less than that in the “old.” At 700°C, 28% of the Ge/Si misfit strain may be relieved by diffusion.