The effect of phase separation phenomenon in InAlAs layers grown by metal-organic chemical vapor deposition on the Schottky barrier height (SBH) is investigated. The phase separation into In-rich and Al-rich InxAlyAs columns of InAlAs (x=0.52, y=0.48) layers was observed when we grow them at a relatively low temperature below 600°C. From the photoluminescence spectrum investigation, we found that the band-gap energy decreased from 1.48 eV for a homogeneous In0.52Al0.48As sample to 1.19 eV for a phase-separated InxAl1-xAs sample due to the band-gap lowering effect by In-rich InxAl1-xAs (x > 0.7) region. From the current density-voltage analysis of the InAlAs Schottky diode, it was also confirmed that the phase-separated InAlAs layers showed a lower SBH value of about 250 meV than it for the normal InAlAs layers. The reduction of SBH arising from the phase separation of InAlAs layers resulted in the larger leakage current in InAlAs Schottky diodes.