This paper reports an efficient method to improve the crystal quality of GaN Gunn diode with AlGaN hot electron injecting layer (HEI). An evident reduction of screw dislocation and edge dislocation densities is achieved by the strain management and the enhanced lateral growth in high temperature grown AlGaN HEI layer. Compared with the top hot electron injecting layer (THEI) structure, the bottom hot electron injecting layer (BHEI) structure enhances the crystal quality of transit region due to the growth sequence modulation of HEI layer. A high Hall mobility of 2934 cm2/Vs at 77 K, a nearly flat downtrend of Hall mobility at the temperature ranging from 300 to 573 K, a low intensity of ratio of yellow luminescence band to band edge emission, a narrow band edge emission line-width, and a smooth surface morphology are observed for the BHEI structural epitaxy of Gunn diode, which indicates that AlGaN BHEI structure is a promising candidate for fabrication of GaN Gunn diodes in terahertz regime.