Molecular beam epitaxy growth of multilayer In x Ga1-x As/GaAs(001) structures with low indium content (x = 0.20–0.35) was studied by X-ray diffraction and photoluminescence in order to understand the initial stage of strain-driven island formation. The structural properties of these superlattices were investigated using reciprocal space maps, which were obtained around the symmetric 004 and asymmetric 113 and 224 Bragg diffraction, and ω/2θ scans with a high-resolution diffractometer in the triple axis configuration. Using the information obtained from the reciprocal space maps, the 004 ω/2θ scans were simulated by dynamical diffraction theory and the in-plane strain in the dot lattice was determined. We determined the degree of vertical correlation for the dot position (“stacking”) and lateral composition modulation period (LCM) (lateral ordering of the dots). It is shown that initial stage formation of nanoislands is accompanied by LCM only for [110] direction in the plane with␣a period of about 50 to 60 nm, which is responsible for the formation of a quantum wire like structure. The role of In x Ga1-x As thickness and lateral composition modulation in the formation of quantum dots in strained In x Ga1-x As/GaAs structures is discussed.