Continuous wave photoluminescence (cw PL) spectroscopy has been used to study the optical properties of a set of InGaNAs epilayers and single quantum wells with nitrogen concentration less than a few per cent at different temperatures and different excitation powers. We found that nitrogen has a critical role on the emission light of InGaNAs nanostructures and the recombination mechanism. The incorporation of a few per cent of nitrogen leads to shrinkage of the InGaNAs band gap. The physical origin of such band gap reduction has been investigated both experimentally and theoretically by using a band anticrossing model. We have found that localization of excitons that have been caused by incorporation of a few per cent of nitrogen in these structures is the main explanation of such anomalous behavior observed in the low-temperature photoluminescence spectra of these nanostructures. The localization energies of carriers have been evaluated by studying the variation of the quantum well (QW) emission versus temperature, and it was found that the localization energy increases with increasing nitrogen composition. Our data also show that, with increasing excitation intensity, the PL peak position moves to higher energies (blue shift) due to the filling of localized states and capture centers for excitons by photo-generated carriers. © IOP Publishing Ltd.