With the combination of the height sensitivity of atomic force microsc
opy and the strain sensitivity of transmission electron microscopy, it
is shown that near singular stress concentrations can develop natural
ly in strained epitaxial films. These crack-like instabilities are ide
ntified as the sources of dislocation nucleation and multiplication in
films of high misfit. This link between morphological instability and
dislocation nucleation provides a method for studying the basic micro
mechanisms that determine the strength and mechanical properties of ma
terials.