We investigated film thickness dependence of domain size and transport property in VO 2 thin films on rutile TiO 2 (001) substrates and identified formation mechanism of the microscaled domain. It was found that domain size decreased with increasing film thickness and the domain boundary consisted of cracks and dislocations, clarified by high-resolution transmission electron microscopy. The detailed images showed, the tensile-strained VO 2 lattices received by TiO 2 (001) were partially relaxed around the cracks and dislocations. The relaxed lattice is likely to return the original metal-insulator transition temperature of 340 K, whereas the tensile-strained lattice has the transition at 300 K in a VO 2 /TiO 2 (001) system. Thus, the mixed states of strained and relaxed crystal lattice and the increase in dislocation density in thicker films cause the overly broad resistance behavior against temperature. Furthermore, the origin of the dislocations and the thickness dependence of the domain size could be explained by the energy release of shear stress generated by competition between the pinning layers at near-interface VO 2 layers holding the tetragonal structure and the near-surface layers separated from the substrate attempting the lattice transformation to a monoclinic structure. This understanding enables us to more precisely design the size and configuration of these domains and their transport properties.