We investigate the interfaces and polarity domains at the atomic scale in epitaxial AlN and GaN/AlN grown by hot-wall metal organic chemical vapor epitaxy on the carbon face of SiC. X-ray diffraction, potassium hydroxide (KOH) wet chemical etching, and scanning transmission electron microscopy combined provide an in-depth understanding of polarity evolution with the film thickness, which is crucial to optimize growth. The AlN grown in a 3D mode is found to exhibit N-polar pyramid-type structures at the AlN–SiC interface. However, a mixed N-polar and Al-polar region with Al-polarity domination along with inverted pyramid-type structures evolve with increasing film thickness. We identify inclined inversion domain boundaries and propose that incorporation of oxygen on the ⟨40–41⟩ facets of the N-polar pyramids causes the polarity inversion. We find that mixed-polar AlN is common and easily etched and remains undetected by solely relying on KOH etching. Atomic scale electron microscopy is, therefore, needed to accurately determine the polarity. The polarity of GaN grown on mixed-polar AlN is further shown to undergo complex evolution with the film thickness, which is discussed in the light of growth mechanisms and polarity determination methods.