High-density dislocations in materials and poor electrical conductivity of p-type AlGaN layers constrain the performance of the ultraviolet light emitting diodes and lasers at shorter wavelengths. To address those technical challenges, we design, grow, and fabricate a novel nanowire structure adopting a graded-index separate confinement heterostructure (GRINSCH) in which the active region is sandwiched between two compositionally graded AlGaN layers, namely a GRINSCH diode. Calculated electronic band diagram and carrier concentrations show an automatic formation of a p-n junction with electron and hole concentrations of ~10 18 /cm 3 in the graded AlGaN layers without intentional doping. The transmission electron microscopy experiment confirms the composition variation in the axial direction of the graded AlGaN nanowires. Significantly lower turn-on voltage of 6.5 V (reduced by 2.5 V) and smaller series resistance of 16.7 Ω (reduced by nearly four times) are achieved in the GRINSCH diode, compared with the conventional p-in diode. Such an improvement in the electrical performance is mainly attributed to the effectiveness of polarization-induced nand p-doping in the compositionally graded AlGaN layers. In consequence, the carrier transport and injection efficiency of the GRINSCH diode are greatly enhanced, which leads to a lower turn-on voltage, smaller series resistance, higher output power, and enhanced device efficiency. The calculated carrier distributions (both