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A novel p-GaN gate AlGaN/GaN high electron mobility transistor (HEMT) structure with a stepped hybrid GaN/AlN buffer layer (S-HEMT) is proposed and simulated by the Sentaurus TCAD in this paper. A stepped hybrid GaN/AlN buffer layer is adopted and the step is near the interface of the gate and drain. First, the breakdown voltage (<italic>BV</italic>) of the proposed S-HEMT is significantly improved with the introduction of a stepped hybrid GaN/AlN buffer layer, which can effectively modulate the electric field distributions along the channel. Second, the AlN buffer layer below the stepped GaN buffer has a large band offset and a strong polarization, which results in a much lower leakage current and a better carrier confinement. Consequently, the <italic>BV</italic> of the proposed S-HEMT will be improved at no expense of the specific on-resistance (<inline-formula> <tex-math notation="LaTeX">${R} _{\mathrm{ on,sp}}$ </tex-math></inline-formula>). Compared with those of the conventional p-GaN gate AlGaN/GaN HEMT on the same gate-to-drain distance of <inline-formula> <tex-math notation="LaTeX">$12 ~\mu \text{m}$ </tex-math></inline-formula>, a higher <italic>BV</italic> of 1781 V and FOM of 0.72 GW/cm² are obtained for the proposed S-HEMT, which are both about five times. The proposed S-HEMT exhibits the potential and advantage in high power electronic applications.