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In this letter, we report the impact of epitaxial Gd2O3 on the electrical properties of an AlGaN/GaN high electron mobility transistor (HEMT) grown on a 150 mm diameter Si (111) substrate. Incorporation of epitaxial Gd2O3 grown by the molecular beam epitaxy technique under a metal gate (metal/Gd2O3/AlGaN/GaN) causes six orders of magnitude reduction in gate leakage current compared to metal/AlGaN/GaN HEMT. We observe that epi-Gd2O3 undergoes complete structural changes from hexagonal to monoclinic as the thickness of the layer is increased from 2.8 nm to 15 nm. Such structural transformation is found to have a strong impact on electrical properties whereby the gate leakage current reaches its minimum value when the oxide thickness is 2.8 nm. We find a similar trend in the density of interface traps (Dit) having a minimum value of 2.98 × 1012 cm−2 eV−1 for the epioxide layer of thickness 2.8 nm. Our measurements also confirm a significant increase in the two dimensional electron gas (2DEG) density (∼40%) at AlGaN/GaN interface with epioxide grown on AlGaN, thus confirming the contribution of epitaxial lattice strain on 2DEG modulation. [ABSTRACT FROM AUTHOR]