Optical and transport measurements carried out in pn diodes and Schottky barriers containing multilayers of InAlAs quantum dots embedded in AlGaAs barriers show that while red emission from quantum dot (QD) states is obtained at similar to1.8 eV, defect states dominate the optical properties and transport in these quantum dots. These defects provide nonradiative recombination paths, which shortens the carrier lifetimes in QD's to tens of picoseconds (from similar to1 ns) and produce deep level transient spectroscopy (DLTS) peaks in both p and n type structures. DLTS experiments performed with short filling pulses and bias dependent measurements on InAlAs QD's on n-AlGaAs barriers showed that one of the peaks can be attributed to either QD/barrier interfacial defects or QD electron levels, while other peaks are attributed to defect states in both p and n type structures.