This Letter reports the polarization induced hole conduction in composition-graded AlInN epitaxial layers grown by metalorganic chemical vapor deposition. First, the composition-graded AlInN layer with an InN mole fraction from 0.12 to 0.20 was formed on c-plane GaN on sapphire, and they were confirmed to show the p-type hole conduction with a less temperature dependence, which is a feature of polarization-induced carriers. Then, blue light-emitting diodes (LEDs) with the composition-graded AlInN layers inserted in the p-type side were fabricated and their vertical current injection was investigated. The electroluminescence (EL) spectra confirmed that the fabricated LEDs exhibited a single-peak blue-light emission with the help of the impurity Mg doping. The LED simulation indicated that the impurity and polarization co-doping effectively compensated and overcame the residual oxygen donors in the AlInN layer and promoted the carrier recombination at the light-emitting layers. Finally, LEDs with the Mg-doped and composition-graded AlInN insertion layer exhibited good current–voltage characteristics with a low forward voltage drop of approximately 3 V in addition to the good EL spectra.