While radiation is known to degrade AlGaN/GaN high-electron-mobility transistors (HEMTs), the question remains on the extent of damage governed by the presence of an electrical field in the device. In this study, we induced displacement damage in HEMTs in both ON and OFF states by irradiating with 2.8 MeV Au4+ ion to fluence levels ranging from 1.72×1010 to 3.745×1013 ions/cm2, or 0.001 to 2 displacement per atom (dpa). Electrical measurement is done in situ, and High-Resolution Transmission Electron Microscopy (HRTEM), Energy Dispersive X-ray (EDX), Geometrical Phase Analysis (GPA), and micro-Raman are performed on the highest fluence of Au4+ irradiated devices. The selected heavy ion irradiation causes cascade damage in the passivation, AlGaN, and GaN layers and at all associated interfaces. After just 0.1 dpa, the current density in the ON-mode device deteriorates by two orders of magnitude, whereas the OFF-mode device totally ceases to operate. Moreover, six orders of magnitude increase in leakage current and loss of gate control over the 2-dimensional electron gas (2-DEG) channel are observed. GPA and Raman analyses reveal strain relaxation after a 2 dpa damage level in devices. Significant defects and intermixing of atoms near AlGaN/GaN interfaces and GaN layer are found from HRTEM and EDX analyses, which can substantially alter device characteristics and result in complete failure.