Time‐resolved photoluminescence (PL) has been employed to study the optical transitions and their dynamic processes and to evaluate materials quality of InGaN epilayers grown by metalorganic chemical vapor deposition. Our results suggest that the PL emissions in InGaN epilayers result primarily from localized exciton recombination. The localization energies of these localized excitons have been obtained. In relatively lower quality epilayers, the localized exciton recombination lifetime τ, decreases monotonically with an increase of temperature. In high quality epilayers, τ increases with temperature at low temperatures, which is a well‐known indication of radiative exciton recombination. Our results demonstrate that time‐resolved PL measurements uniquely provide opportunities for the understanding of basic optical processes as well as for identifying high quality materials.