We present the electrical characteristics of an AlGaN/GaN/p-GaN heterostructure field-effect transistor (HFET) with a Si delta-doped layer. The p-GaN layer greatly improves buffer isolation (between neighboring mesas) in the AlGaN/GaN HFET and leads to effective carrier confinement. The Si delta-doped layer compensates not only the carrier depletion caused by the formation of a pn junction, but also even causes an increase in two-dimensional electron gas (2DEG) density. The proposed AlGaN/GaN HFET shows greatly improved electrical characteristics such as high drain current density and transconductance and low buffer and gate leakage currents compared with those of conventional AlGaN/GaN HFETs.