The potential performance improvement achieved by reducing the gate length of GaAs MESFET's below 0.25 μm is investigated using a novel two-dimensional nonlocal numerical model. The charge, potential, and electron energy distributions in three devices having respectively 0.5-, 0.3-, and 0.15-μm gates are analyzed to provide an insight into the transport phenomena at hand. The I-V characteristics and the small-signal parameters are evaluated and the effect of gate length assessed. It is shown that no improvement in cutoff frequency is achieved below 0.2 μm while the effect of parasitic capacitance and gate-access resistance becomes more detrimental.