Recently, significant progress has been made in III-nitride nanocrystals. They exhibit unique structural, electronic, optical, and photocatalytic properties, and have emerged as a functional platform to realize high-performance optoelectronic, electronic, quantum, and solar energy devices. Compared with conventional III-nitride epilayers and quantum wells, dislocation-free III-nitride nanocrystals can, in principle, be achieved on lattice mismatched foreign substrates due to the efficient surface strain relaxation. In this Feature Article, the authors discuss the epitaxy, characteristics, and some emerging device applications of III-nitride nanocrystals grown by plasma-assisted molecular beam epitaxy.