Surface and interface morphology of thermal oxides grown on 4-off (0001) oriented 4H-SiC substrates by dry O2 oxidation was investigated using atomic force microscopy (AFM) and transmission electron microscopy (TEM). When step bunching was present on a starting wafer, oxide surface roughness was much larger than that of the starting 4H-SiC surface. This is attributed to the difference in oxidation rate between the terrace and the step face. A step-terrace structure on 4H-SiC(0001) was mostly preserved on the oxide surface, but pronounced oxidation occurred around the step bunching. Cross-sectional TEM observation showed that the SiO2/4H-SiC interface became smoother than the initial surface and the thickness of the SiO2 layer fluctuated. Such SiO2 thickness fluctuation may cause a local electric field concentration when a voltage was applied to the oxide, thus degrading the dielectric breakdown characteristics of 4H-SiC metal-oxide-semiconductor (MOS) devices.