We report on the microstructural evolution and physical properties of epitaxial δ-TaN layers grown on MgO(001) at 600 °C by ultrahigh vacuum reactive magnetron sputtering of Ta in mixed Ar/N2 discharges as a function of the N2 fraction fN2 (0.100⩽fN2⩽0.275) and the incident ion energy Ei (8.4⩽Ei⩽65 eV). The ratio of the ion-to-Ta fluxes Ji/JTa incident at the growing film was maintained at 11±0.5 with 0.100⩽fN2⩽0.200 and 15±0.3 with 0.250⩽fN2⩽0.275. High-resolution x-ray diffraction, transmission electron microscopy, and Rutherford backscattering spectrometry results show that films grown with Ei≲40 eV are single-phase δ-TaNx(001), with x increasing from 0.94 with fN2=0.100 to 1.37 with fN2=0.275, exhibiting a cube-on-cube epitaxial relationship with the substrate: (001)δ-TaN‖(001)MgO and [100]δ-TaN‖[100]MgO. However, the use of Ei≲20 eV leads to δ- TaNx(001) layers which are underdense with a self-organized array of 1-nm-wide nanopipes oriented predominantly along orthogonal 〈100〉 directions. The nanopipes, which are first observed at film thicknesses of ≃5 nm and extend to the surface, form due to the combination of low adatom surface diffusivities, leading to kinetic roughening, and atomic shadowing. Fully dense stoichiometric epitaxial δ-TaN(001) films were obtained with Ei=30 eV and fN2=0.125. Increasing Ei to 40 eV results in a high density of {111} stacking faults. Films grown with even higher ion energies, 40<Ei⩽65 eV, contain large concentrations of residual extended defects as well as hexagonal γ-Ta2N second-phase inclusions. The room-temperature resistivity, hardness, elastic modulus, and relaxed lattice constant of fully dense stoichiometric δ-TaN(001) are 185±15 μΩ cm, 32.9±0.9 GPa, 435±15 GPa, and 0.4351±0.0002 nm, respectively.