This letter reports electrical properties of Al-GaN/GaN high electron mobility transistor (HEMT) with epitaxial Nd2O3 as a gate insulator. The introduction of Nd2O3 between metal and semiconductor in the gate region, results in two orders of magnitude reduction of gate leakage current, which remains unchanged even at higher temperature of 200°C. The Ion/I off also remains constant at 200°C and the transconductance stays at its peak over a significant range of gate bias (4.5 V). This linearity is attributed to the increased electron concentration in channel due to introduction of epitaxial Nd2O3 and the resulting strain on AlGaN barrier layer. The increased 2DEG density also leads to an increase in output drain current from the metal oxide semiconductor(MOS)-HEMT.