We demonstrate the self-assembled generation of nanoholes on AlGaAs surfaces by local droplet etching (LDE). For the etching process, Ga is deposited on the surface, where liquid droplets are formed in a Volmer-Weber-like growth mode. The etching takes place locally at the interface between droplets and substrate and removes a significant amount of substrate material. The structural properties of the LDE nanoholes are studied with atomic force microscopy as function of etching temperature and Ga coverage. A bimodal depth distribution with flat and deep holes is observed. The formation of flat holes can be almost suppressed by optimized etching parameters. The depth of deep holes was adjusted by the process parameters up to a maximum depth of 15 nm. The density of deep holes is in the range 5 x 10(-7)-1 x 10(-8) cm(-2) and depends only slightly on the etching parameters. However, the density can be significantly increased by repeated etching. (C) 2008 Elsevier B V All rights reserved.