During the fabrication process of AlGaN/GaN HEMTs, SiNx films grown by plasma enhanced chemical vapor deposition (PECVD) are usually utilized to passivate AlGaN/GaN surface. However, PECVD with high energy of plasma would induce the surface damage. Plasma in plasma enhanced atom layer deposition (PEALD) process is gentle and remote. Consequently, AlN films grown by PEALD are explored as passivation layer on AlGaN/GaN surface. In comparison with PECVD SiNx, AlN film grown by PEALD, accompanied with 850 °C rapid temperature annealing (RTA), can improve 2DEG mobility 16.4%, the peak transconductance 38.6%, saturation drain current 26.3%, reduce static on-resistance 19.2%, and dynamic on-resistance only increased 14% after 50 V off-state stress and 200 μs recovering time. The annealing process at 850 °C changed AlN film polycrystalline structure and generated positive polarization charges of 3.6 × 1012 cm−2 at AlN/GaN heterojunction, which compensated the deep-level trap charging effect, and suppressed current collapse and increase of dynamic on-resistance. Keywords: GaN HEMTs, PEALD, RTA, Polycrystalline AlN, Polarization charges, Dynamic on-resistance