The dc and electron impaction ionization characteristics of an InP/InGaAs double heterojunction bipolar transistor with a step-graded InAlGaAs collector structure are studied and reported. From the experiments, the studied device shows a better common-emitter breakdown voltage and lower output conductance at higher temperature operations. Due to the insertion of a step-graded InAlGaAs collector structure at the base-collector heterojunction, the usually observed switching and hysteresis phenomena in InP/InGaAs-based HBTs are not seen in the studied device. The temperature-dependent electron impact ionization characteristics are also investigated. Above all, the studied DHBT device provides the promise for millimeter-wave and power circuit applications.