Measurements of microwave surface resistance, Rs, at subcritical currents as a function of temperature with varying dc magnetic field upto 0.8 T have shown peak effect (PE) in epitaxial DyBa2Cu3O7−δ (DBCO) and YBa2Cu3O7−δ (YBCO) thin films grown by pulsed laser deposition on 〈100〉 LaAlO3 substrates. Microwave measurements were performed on microstrip resonators as test vehicles. Occurrence of a peak in Rs in dc magnetic field is governed by the nature and concentration of defects. Evidence shows that thinner films with a higher ratio of areal density of extended defects, ne (such as twin boundaries), to the areal density of point defects, np, show PE at the measurement frequencies 4.88 and 9.55 GHz; whereas, thicker films (⩾3000 Å) with a smaller ne/np ratio do not show PE. 2500 Å thick YBCO film shows a double peak structure at 9.55 GHz, thereby suggesting two sets of twin boundaries in this film having different κp values. Measurements carried out on low-twinned LaAlO3 substrates show that 2400 Å thick DBCO film does not exhibit the PE phenomenon at 4.88 GHz upto to an applied field of 0.8 T; this indicates that twins propagated from the LaAlO3 substrates are responsible for the occurrence of PE at microwave frequencies. Oxygen ion irradiation (90 MeV, 3×1013 ions/cm2) of 2500 Å DBCO film has been found to shift the peak to lower temperature at 4.88 GHz, but significantly suppress the peak at 9.55 GHz. Depinning frequency, ωp vs. T plot obtained for the 2400 Å DBCO film shows a peak due to the peak in its Rs vs. T plots.