The photocarrier-regulated electrochemical (PREC) process was developed for fabricating recessed-gate AlGaN/GaN high-electron-mobility transistors (HEMTs) for normally off operation. The PREC process is based on photo-assisted electrochemical etching using low-energy chemical reactions. The fundamental photo-electrochemical measurements on AlGaN/GaN heterostructures revealed that the photo-carriers generated in the top AlGaN layer caused homogeneous etching of AlGaN with a smooth surface, but those generated in the GaN layer underneath caused inhomogeneous etching that roughens the surface. The concept of the PREC process is to supply the photo-carriers generated only in the AlGaN layer by selecting proper conditions on light wavelength and voltage. The phenomenon of self-termination etching has been observed during the PREC process, where the etching depth was controlled by light intensity. The recessed-gate AlGaN/GaN HEMT fabricated with the PREC process showed positive threshold voltage and improvement in transconductance compared to planar-gate AlGaN/GaN HEMTs.