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A C-band high efficiency and high gain two-stage power amplifier based on AlGaN/GaN high electron mobility transistor (HEMT) is designed and measured in this paper. The input and output impedances for the optimum power-added efficiency (PAE) are determined at the fundamental and 2nd harmonic frequency (f0 and 2f0). The harmonic manipulation networks are designed both in the driver stage and the power stage which manipulate the second harmonic to a very low level within the operating frequency band. Then the inter-stage matching network and the output power combining network are calculated to achieve a low insertion loss. So the PAE and the power gain is greatly improved. In an operation frequency range of 5.4 GHz‐5.8 GHz in CW mode, the amplifier delivers a maximum output power of 18.62 W, with a PAE of 55.15% and an associated power gain of 28.7 dB, which is an outstanding performance.