The germanosilicidation of Ni on strained (001) Si0.8Ge0.2, particularly Ge segregation, grain boundary grooving, and surface morphology, during rapid thermal annealing (RTA) was studied. High-resolution cross-sectional transmission electron microscopy (HRXTEM) suggested that Ge-rich Si1−zGez segregation takes place preferentially at the germanosilicide/Si1−xGex interface, more specifically at the triple junctions between two adjacent NiSi1−uGeu grains and the underlying epi Si1−xGex, and it is accompanied with thermal grooving process. The segregation process accelerates the thermal grooving of NiSi1−uGeu grain boundaries at the interface. The segregation-accelerated grain boundary grooving has significant effect on the surface morphology of NiSi1−uGeu films in Ni-SiGe system.