A Pd/AlGaN/GaN heterostructure field-effect transistor (HFET) type hydrogen sensor, with sensitization, activation, and electroless plating (EP) deposition approaches, is fabricated and investigated. Based on sensitization and activation processes, the dense and uniform Pd layer exhibits small grain size (38.14±7.24nm) and less surface roughness in gate region. Experimentally, for a 1μm gate-length HFET device, advantages of lower temperature-dependent variation of the maximum drain saturation current (−0.52mA/mmK), maximum extrinsic transconductance (−0.13mS/mmK), and threshold voltage (−1.05mV/K) are obtained over the temperature range from 300 to 600K. For three-terminal-controlled hydrogen gas sensing phenomena, a high current variation of 34.9mA/mm is found in a 1% H2/air gas at 375K. The exothermic hydrogen adsorption reaction with the enthalpy and entropy of −45.3kJmol−1 and −118.2Jmol−1K−1, respectively, are obtained. Furthermore, the response analysis reveals that the initial response rate is significantly increased with the hydrogen concentration and temperature. The related activation energy for hydrogen adsorption is about 11.65kJmol−1.