In this paper, experimental results are reported about the new Al0.25Ga0.75N/GaN high electron mobility transistor (HEMT) with a step AlGaN layer. The rule of 2DEG concentration variation with the thickness of AlGaN epitaxial layer has been applied to the new AlGaN/GaN HEMTs: The step AlGaN layer is formed at the gate edge by inductively coupled plasma etching, the 2DEG concentration in the etched region is much lower than the other parts of the device. A new electric field peak appears at the corner of the step AlGaN layer. The high electric field at the gate edge is decreased effectively due to the emergence of the new electric field peak, and this optimizes the surface electric field of the new AlGaN/GaN HEMTs. The new devices have the same threshold voltage and transconductance as the conventional structure, -1.5 V and 150 mS/mm. That means, the step AlGaN layer does not affect the forward characteristics of the AlGaN/GaN HEMTs. As the more uniform surface electric field distribution usually leads to a higher breakdown voltage (BV), with the same gate to drain length LGD=4 m, the BV can be improved by 58% for the proposed Al0.25Ga0.75N/GaN HEMTs as compared with the conventional structure. At VGS=1 V, the saturation currents (Isat) is 230 mA/mm for the conventional Al0.25Ga0.75N/GaN HEMT and 220 mA/mm for the partially etched Al0.25Ga0.75N/GaN HEMT (LEtch=4 m, LGD=4 m). The decrease of Isat is at most 10 mA/mm. However, as the BV has a significant enhancement of almost 40 V, these drawbacks are small enough to be acceptable. During the pulse I-V test, the current collapse quantity of the conventional structure is almost 40% of the maximum IDS(DC), but this quantity in the new devices is only about 10%, thus the current collapse effect in Al0.25Ga0.75N/GaN HEMTs has a significant remission for a step AlGaN layer. And as the high electric field peak at the gate edge is decreased, the effect of the gate electrode on electron injection caused by this electric field peak is also included. The injected electrons may increase the leakage current during the off-state, and these injected electrons would form the surface trapped charge as to decrease the 2DEG density at the gate. As a result, the output current and the transconductance would decrease due to the decreased electron density during the on-state. That means, with the region partially etched, the electron injection effect of the gate electrode would be remissed and the stability of Schottky gate electrode would be improved. In addition, due to the decrease of the high electric field at the gate edge, the degradation of the device, which is caused by the high electric field converse piezoelectric effect, will be restrained. The stability of the partially etched AlGaN/GaN HEMT will become better.