AlGaN/GaN HFETs with different undoped GaN thicknesses were grown on Fe‐doped freestanding GaN substrates by conventional MOVPE. To realize a high drain current, thick undoped GaN is found to be necessary. SIMS measurement shows that Fe is redistributed into the epilayer, by which the scattering center is generated at the channel when the thickness of the undoped GaN is insufficient. We also observed a similar Fe profile in the GaN/sapphire template placed on the side of the Fe‐doped GaN substrate during growth. Therefore, Fe in the Fe‐doped GaN substrate is redistributed not only through a solid but also through vapor. (© 2010 WILEY‐VCH Verlag GmbH & Co. KGaA, Weinheim)