The kinetics of Ge hut cluster formation and the evolution of film stress have been studied during Ge deposition at 400 and 500 °C by high-resolution low-energy electron diffraction and surface-stress-induced optical deflection. The hut clusters grow coherent to the Si substrate but show an increased layer distance of 4% due to strain-induced tetragonal distortion. The distortion of the Ge unit cell adds up to more than 8%. The sudden onset of hut formation is observed at 3.5 monolayers of Ge. Individual hut clusters instantly grow to a width of 20 nm. The strain relief of the order of 15%–20% is maximized by complete dissociation of the Ge wetting layer. Together with this Ge only two additional monolayers of Ge are necessary to cover the entire surface with fully evolved hut clusters.