Interfacial chemical states and Schottky barrier heights (SBHs) for indium tin oxide (ITO) electrodes on Mg:GaN. films have been investigated by high-resolution hard X-ray photoemission spectroscopy (HXPES), and have been correlated with electrical properties. HX-PES has revealed that the large downward band bending of 2.6 eV was drastically reduced by ITO deposition and annealing, resulting in low SBH of 0.2 eV which is well correlated with good ohmic contact. Improvements of electrical properties can be attributed to the combination of (1) the interfacial layer with large work function, (2) the ordered interfacial dipole layer and (3) activation by ITO catalytic effect. (C) 2008 Elsevier B. V. All rights reserved.