Narrow Ge layers embedded in Si are investigated using photoluminescence (PL) spectroscopy. With increasing layer thickness a growth mode changeover from two‐dimensional (2D) strained‐layer growth to three dimensional Stranski–Krastanov growth is observed. Additional PL lines that are redshifted with respect to the PL signal of the 2D strained layers are attributed to islands formed by three‐dimensional growth. The occurrence of these new lines is accompanied by a blueshift of the PL of the 2D layers, indicating a strong Ge diffusion from the 2D layers towards the islands.