We present a detailed atomistic analysis of the electronic properties of m‐plane InGaN/GaN quantum wells. The tight‐binding model used treats realistically sized systems atomistically and accounts for compositional and structural inhomogeneities. Local variation in strain and built‐in potential arising from random alloy fluctuations are explicitly included in the model. Many energy states of the supercells considered are calculated in order to determine the impact of the alloy fluctuations on the electronic structure of the system under investigation. We find that while the electrons are relatively insensitive to the local indium environment, the hole states are highly sensitive to it and are subject to very strong localization effects. These effects persist several states into the valence band. This strong localization of the hole states leads to a very broad distribution of ground state energies in different random configurations. Furthermore, we see that the localization leads to poor overlap between different hole states resulting in a reduced probability of transfer of carriers between different states. This feature should play an important role for transport properties in m‐plane InGaN/GaN QWs.