The atomic structure and energy spectrum of InAs quantum dots (QDs) in an AlAs matrix have been experimentally studied by transmission electron microscopy (TEM) and steady-state photoluminescence (PL) combined with computational work. The degree of intermixing of InAs and AlAs has been investigated by means of TEM and PL compared with theoretical predictions and found to increase with increasing growth temperature and growth interruption. The band alignment in the QDs is shown to be of type I with the lowest conduction-band states at the direct Γ or at the indirect XXY minima of the QD conduction band, depending on the QD's size and composition. © 2008 The American Physical Society.