Abstract Electrical and material properties of plasma‐enhanced atomic layer deposited (PE‐ALD) AlON on dry‐etched n ‐type GaN substrates are investigated for nitrogen concentration ranging from 1.5% to 7.1%. Firstly, an increase in flat‐band voltage ( V FB ) and its hysteresis with increasing nitrogen concentration is reported. The increase in V FB is associated with the nitrogen content whereas the increase in hysteresis to the presence of impurities (hydroxyl groups and carbon‐related impurities). Alongside the nitrogen concentration, the impact of different post‐deposition annealing (PDA) temperatures is studied (400–800 °C). Stable AlON layers and interfaces with etched GaN substrates are reported with slight gallium oxide growth or gallium diffusion towards the dielectric layer. Finally, with increasing PDA temperature, an increase in V FB and a significant reduction of both V FB hysteresis and interface state density ( D it ) are observed, notably at the measuring temperature of 150 °C. These results present a promising pathway toward more reliable and stable normally‐OFF GaN‐based MOS‐channel high electron mobility transistors (MOSc‐HEMTs).