Periodic structures of GdN particles encapsulated in a single crystalline GaN matrix were prepared by plasma assisted molecular beam epitaxy. High resolution x-ray diffractometery shows that GdN islands, with rock salt structure are epitaxially oriented to the wurtzite GaN matrix. Scanning transmission electron microscopy combined with in situ reflection high energy electron diffraction allows for the study of island formation dynamics, which occurs after 1.2 monolayers of GdN coverage. Magnetometry reveals two ferromagnetic phases, one due to GdN particles with Curie temperature of 70 K and a second, anomalous above room temperature phase.

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