Computer simulations were used to investigate the effect of stresses on the energy of defects in Ge, Ge7% Si93% (referred to as alloy) films on Si and encapsulated aluminum thin films. In Ge films, misfit dislocations were energetically favorable over coherent interfaces. Although the alloy films had lower energy compared to Ge films, they also formed dislocations at film thicknesses greater than 25 – 30 Å. The energy of vacancy insertion at the film surface, which nucleates a misfit dislocation, increased with tensile stress. In encapsulated aluminum, agglomeration of vacancies leads to formation of voids. Simulations indicate that the activation energy of vacancy migration increased with compressive stresses. Thus compressive stresses in aluminum may prevent formation of voids, while tensile stresses in Ge film may prevent formation of misfit dislocations.