A multilayer stack of bonded GaAs wafers, each layer rotated 180° from the adjacent one, has been proposed for quasi-phase-matched second harmonic generation. Current bonding technology, however, often leads to unacceptable optical losses and, therefore, poor device performance. In this study, three sources of optical losses were investigated: (i) interfacial defects between the wafers, (ii) bulk defects within the wafers, and (iii) decomposition at the exposed outer surfaces. Surface losses due to incongruent evaporation were easily eliminated by repolishing the outer surfaces. However, to minimize the losses from interfacial and bulk defects, it was necessary to investigate the relationship between these defects and the processing parameters. It was found that an increase in temperature and/or time led to a decrease in interfacial defects, but an increase in bulk and surface defects. Optimized processing conditions were developed which permit the preparation of stacks containing over 50 layers of (100) GaAs wafers, and about 40 layers of (110) GaAs wafers. Optical losses as low as 0.1 to 0.3 % per interface (at 5.3 and 10.6 μm) were observed for the (110) oriented multilayer structures.