Analytical and finite‐element‐method calculations have been conducted for obtaining strain distributions and consequent carrier confinement potential changes in semiconductor strained wires and dots made of lattice‐mismatched materials. The inhomogeneous strain distribution modifies the confinement potentials locally, which causes carrier wave function localization. First, to obtain a fundamental strain distribution and band‐structure change semiquantitatively, analytical calculations are performed in simple, symmetrical structures such as an InP cylinder and an InP ball buried in GaAs or InGaP matrices assuming isotropic valence bands and isotropic elastic characteristics. Here, strain is found to exist in the surrounding matrices as well as in the wires and dots. This effect is peculiar to the strained wire and dot because in pseudomorphic strained layers there is no strain in surrounding matrices. Thus, the band structures are found to be greatly modified in the surrounding matrix as well as in the wire or dot. Hole effective masses at the band edge are also calculated by diagonalizing a 4×4 orbital strain Hamiltonian. Furthermore, to calculate the effects in a realistic structure, finite‐element‐method calculations are performed for a triangle‐shaped InP wire along the 〈110〉 direction, including anisotropic elastic characteristics. Calculated nonuniform strain within the wire is found to modify the confinement potential, which localizes electrons near the base. Valence subbands are largely split near the vertices. From these results, the strained wires and dots are found to be applicable for quantum wires and dots, in which the quantum confinement effect will be enhanced by the modified confinement potential due to the inhomogeneous strain. © 1994 American Institute of Physics.