GaAs epitaxial layers were grown on (100) GaAs and vicinal substrates (2-degrees off (100) toward (I 10)) by close-spaced vapor transport (CSVT) using water vapor as transport agent. We demonstrate that the temperature at which water vapor is injected into the reactor, T(inj), is a criticial parameter for the layer morphology. Furthermore, the optimum T(inj), is a function of water partial pressure, P(H2O). For each P(H2O), there is a T(inj) range for which specular layers are obtained. This range is defined for P(H2O) = 0.008-4.58 Torr (1 Torr = 133.3 Pa). The only defects appearing on the specular layers grown on (100) GaAs substrates are oval hillocks (structureless oval defects, and occasionally oval plateaus and oval defects with a faceted central core head). All oval hillocks have their long axis, L1, parallel to < 110 >. By measuring L1 and L2 (the short axis of the defect, perpendicular to L1), lateral growth rates of GaAs are obtained. They vary with P(H2O). At high P(H2O), L1/L2 = while L1/L2 is 1 at low water vapor pressure. All oval hillocks result from the contamination of the substrate surface. By using vicinal GaAs substrates, the oval hillock density was decreased to about 500 cm-2, a result similar to that obtained with molecular beam epitaxy.