A method of fabricating high-quality, substantially relaxed SiGe-on-insulator substrate materials which may be used as a template for strained Si is described. A silicon-on-insulator substrate with a very thin top Si layer is used as a template for compressively strained SiGe growth. Upon relaxation of the SiGe layer at a sufficient temperature, the nature of the dislocation motion is such that the strain-relieving defects move downward into the thin Si layer when the buried oxide behaves semi-viscously. The thin Si layer is consumed by oxidation of the buried oxide/thin Si interface. This can be accomplished by using internal oxidation at high temperatures. In this way the role of the original thin Si layer is to act as a sacrificial defect sink during relaxation of the SiGe alloy that can later be consumed using internal oxidation.