The dependence of gain compression on the Al-mole fraction and the thickness of the AlGaN barrier layer are reported for typical undoped supply layer AlGaN/GaN HFETs using a physics-based model. The gain compression is calculated using a large signal circuit model. The intrinsic circuit parameters are extracted from a physics-based model that self-consistently solves the Schrodinger and Poisson's equations to determine the 2DEG concentration in the channel including the effects of both spontaneous and piezoelectric polarization present in the AlGaN barrier and the underlying GaN layers. Transport parameters are obtained by ensemble Monte Carlo simulation and device non-linearity is addressed using Volterra series analysis. With AlGaN barrier thickness increasing from 100 to 250 Angstrom, the 1 dB gain compression point ranges from 5 to 22 dBm of input power at 300 K for 0.25 x 100 mum Al0.20Ga0.80N/GaN HEMTs. On the other hand, a similar device with a barrier AlxGa1-xN layer thickness of 300 Angstrom AlxGa1-xN the 1 dB gain compression point at 300 K increases from 6 dBm for x = 0.1 to 20 dBm for x = 0.3. The improvements in output power handling capability with increasing barrier layer thickness and Al-mole fraction are attributed to an increased device transconductance resulting from an increased sheet carrier density in the channel. A decrease in the gain compression point due to an increase in temperature is also presented. (C) 2004 Elsevier Ltd. All rights reserved.