Through the recrystallization of an amorphous heterostructure, obtained by MeV Fe ion implantation, we are able to tailor a standard epitaxial semiconductor material, a small gap InGaAsP/InP alloy, for photoconductive terahertz optoelectronics. Here, we report on microstructural changes occurring in the material over a broad range of rapid thermal annealing temperatures, using X‐ray diffraction line profile analysis and transmission electron microscopy. Results show a complete amorphous transition of the heterostructure after multiple‐energy implantations done at 83 K. Upon thermal annealing, multiple structural layers develop via solid phase epitaxy and solid phase recrystallization. The photoconductive InGaAsP layer becomes polycrystalline and submicron grained, with high crystalline volume fraction and apparent ⟨110⟩ texture. Many grains are elongated and internally faulted, with high densities of planar faults occurring on closed‐packed (111) planes. The X‐ray diffraction line broadening is anisotropic and evolves with rapid thermal annealing temperatures. At 500 °C, the X‐ray coherent domain size estimate of 10 nm is aligned reasonably with electron microscopy made in faulted areas. Above 500 °C, a significant decrease of the planar fault density is detected. We discuss the influence of these microstructural changes happening with recrystallization temperatures on the ultrafast photoconductive response of Fe‐implanted InGaAsP/InP.