Success in incorporating single crystal, epitaxial metal layers into semiconductors will have a significant impact on electronic and optical devices. The growth of GaAs on (001) pseudomorphic NiAl/GaAs by molecular beam epitaxy has been studied using transmission electron microscopy. The island growth of GaAs on pseudomorphic (lattice matched) NiAl is the origin of the formation of stacking faults and microtwins in the GaAs overlayer. The GaAs islands are considered to be due to heterogeneous nucleation, which occurs more easily at the corner of a step on a strained metal film. Growth of almost twin free In0.25Al0.75As on thick, lattice relaxed, epitaxial NiAl films has been achieved, which supplying useful information for the investigation of the possible factors causing poor quality of GaAs overlayers.