The strong photoluminescence (PL) signal at wavelengths ranging from 1,300 to 1,500 nm was observed in GaAsBi epitaxial layers grown by migration-enhanced epitaxy and annealed at 600 • C and higher temperatures. PL measurements at liquid helium temperatures showed two peaks at ∼0.9 and ∼1 eV. It was found that intensity of the higher energy peak decreases with temperature leaving only the lower energy peak at room temperature. Structural investigations demonstrated that annealing reduces Bi content in GaAsBi lattice by precipitating bismuth in nanometer-scale clusters. It is suggested that PL can be caused by the semimetal–semiconductor transition quantum confinement due to the quantum confinement effect in Bi clusters.