Microscopy is typically used as a post-mortem analytical tool in performance and reliability studies on nanoscale materials and devices. In this study, we demonstrate real time microscopy of the operation and failure of AlGaN/GaN high electron mobility transistors inside the transmission electron microscope. Loading until failure was performed on the electron transparent transistors to visualize the failure mechanisms caused by self-heating. At lower drain voltages, thermo-mechanical stresses induce irreversible microstructural deformation, mostly along the AlGaN/GaN interface, to initiate the damage process. At higher biasing, the self-heating deteriorates the gate and catastrophic failure takes place through metal/semiconductor inter-diffusion and/or buffer layer breakdown. This study indicates that the current trend of recreating the events, from damage nucleation to catastrophic failure, can be replaced by in situ microscopy for a quick and accurate account of the failure mechanisms.