Using liquid phase epitaxy (LPE), we grew an InxGa1-xAs layer (x less-than-or-equal-to 0.04) on a (111)B GaAs substrate using epitaxial lateral overgrowth (ELO), and studied the effects of ELO on reducing dislocations in mismatched heteroepitaxy. From observing etch pits corresponding to dislocations in the ELO layer, we found that ELO was effective in reducing the etch pit density (EPD) on mismatched heteroepitaxial layers. The largest reduction was obtained for a seed oriented in the <110> direction. We considered the reason for the EPD dependence on the direction of the seed to be as follows. Most of the etch pits in the ELO layers are caused by the propagation of misfit dislocations generated in the layer grown on the seed. For a seed in the <110> direction, along which misfit dislocations propagate, a large amount of strain energy was released by the dislocations propagating along the seed orientation. This causes the dislocations in the ELO layer to be suppressed.