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In this work, we demonstrate an easy channel-engineering method using oxygen-plasma treatment followed by in-situ annealing before gate dielectric deposition on GaN. A crystalline GaON nanophase was identified to serve as an optimized channel layer in the gate region of E-mode GaN metal-insulator-semiconductor field-effect transistors (MIS-FETs). The atomic-scale element distribution and crystalline structure of the GaON nanophase were revealed by aberration-corrected scanning transmission electron microscopy. First-principles calculations further correlate the enhanced thermal stability with the atomic observation of the refined structure in the GaON nanophase. Owing to the atomically sharp gate-dielectric/channel interface and low interface trap density (Dit), the boosted performance of the E-mode MIS-FET was achieved with the GaON channel. This study not only validates an approach of local channel modification for high-performance normally off GaN MIS-FETs but also opens possibilities of utilizing this crystalline GaON nanophase as a promising channel material in various GaN devices. [ABSTRACT FROM AUTHOR]