We explore the morphological stability during the growth of strained multilayer structures in a dynamical model which describes the coupling of elastic fields, wetting effect, and deposition process. We quantitatively show the significant influence of the wetting effect on the stability properties, in particular for short-period multilayers. Our results are qualitatively similar to recent experimental observations in AlAs/InAs/InP(001) system. We also give predictions for strainbalanced multilayers.Strained periodic multilayer films composed of different material layers have attracted much attention since such material structures can have tunable electronic properties. Among the actively investigated systems is the multilayer with alternating tensile/compressive layers coherently grown on a substrate, resulting in a modulated structure like short-period superlattice [e.g., GaAs/InAs 1 or AlAs/InAs 2,3,4 on InP(001)] or a multiple quantum well [e.g., GaInP/InAsP on InP(001)] 5 . Generally morphological instability occurs in such coherent lattice-mismatch multilayer structures, driven by a gradual release of misfit-generated stresses when dislocations are absent. Consequently, undulations are observed in the strained layers, instead of ideally flat interfaces. This stress-driven morphological instability can lead to lateral compositional modulations in vertical short-period superlattices, 1,2,3,4 as a result of layer thickness modulations (caused by interface rippling) and different material components in adjacent layers. 3,5 The spontaneous formation of these lateral modulations is also a promising way to self-organize fabrication of low-dimensional quantum heterostructures, especially quantum wires. 1,2,3 Although understanding of the detailed growth mechanism in multilayer structures is important and of much interest for both fundamental studies and device applications, it is still far from complete due to the complexity of the system. This complexity arises from the coupling of strain fields in different layers, and the nonequilibrium nature of the growing film for which material deposition rates play an important role in the pattern formation. Previous theoretical analyses use some approximations to determine the elastic fields, treating each buried island 6 or nonplanar interface 7 of the multilayer as a misfitting inclusion in a semi-infinite homogeneous medium. Recently, a general method has been developed to directly calculate the elastic state of the multilayer system. 8 Wetting effects have been considered in the context of single-layer strained film growth, 9,10 but not for multilayers. In this letter, we attempt to remedy this. The wetting effect arises from the change of material properties across interlayer interfaces within the system, and is especially important for thin composite layers. Here, we incorporate the wetting effect (arising from nonlinear elastic contributions 10 ) in the early morphological evolution of growing multilayer films. We focus on the stability properties of the system and o...