We compare the structural and electronic properties of compressively strained high In-concentration InGaAs-based pseudomorphic high electron mobility transistors (pHEMTs) grown with either lattice-matched or tensile strained InAlAs buffers on InP. We demonstrate that strain-compensating In(x)A(1-x)As/In0.75Ga0.25As/InP pHEMTs can eliminate the formation of misfit dislocations and improve transport properties. We compared structures with lattice-matched (X-In = 0.52) and tensile strained (X-In = 0.48) InxAl1-xAs buffers and barriers grown by molecular beam epitaxy. The channel thickness ranged from 15 to 40 nm. Both 60 degrees mixed dislocations and 90 degrees edge dislocations form at the interface between the strained In0.75Ca0.25As channel and the lattice-matched InAlAs buffer layer grown on InP by molecular beam epitaxy with higher dislocation densities for thicker channel layers. For structures with the channel layer thickness of 15-25 nm grown on a tensile strained InAlAs layer, misfit dislocations cannot be seen in atomic force microscopy or Nomarski images. Transport properties also show that the channel mobility is higher for the tensile strained structures. Excess stress in the channel layer drives relaxation, and calculations based on the excess force acting on dislocations confirm that the growth of tensile strained layers before and after the compressive strained channel reduces the driving force for misfit dislocation nucleation in the channel.