Self-assembled lateral quantum wells in alloys of AlInAs, epitaxially deposited by metal-organic chemical vapor deposition on InP, are studied by transmission electron microscopy, modulation spectroscopy, and photoluminescence. Under particular growth conditions, the growth of a homogeneous layer results in the spontaneous self-assembly of a sequence of quantum wells with quantization axes oriented along the [110] direction. With respect to a homogeneous alloy of similar average composition, the band gap reduction observed is as large as 360 meV. A polarization anisotropy exceeding 90% is observed for the lowest energy transition and a large valence band splitting of 139 meV separates the heavy- and light-hole-like valence bands.