The nanoscale distribution of Bi in InPBi is determined by atom probe tomography and transmission electron microscopy. The distribution of Bi atoms is not uniform both along the growth direction and within the film plane. A statistically high Bi-content region is observed at the bottom of the InPBi layer close to the InPBi/InP interface. Bi-rich V-shaped walls on the (−111) and (1–11) planes close to the InPBi/InP interface and quasi-periodic Bi-rich nanowalls in the (1–10) plane with a periodicity of about 100 nm are observed. A growth model is proposed to explain the formation of these unique Bi-related nanoscale features. These features can significantly affect the deep levels of the InPBi epilayer. The regions in the InPBi layer with or without these Bi-related nanostructures exhibit different optical properties