AlN Schottky barrier diodes with low ideality factor (<1.2), low differential ON-resistance (<0.6 mΩ cm2), high current density (>5 kA cm−2), and high breakdown voltage (680 V) are reported. The device structure consisted of a two-layer, quasi-vertical design with a lightly doped AlN drift layer and a highly doped Al0.75Ga0.25N ohmic contact layer grown on AlN substrates. A combination of simulation, current–voltage measurements, and impedance spectroscopy analysis revealed that the AlN/AlGaN interface introduces a parasitic electron barrier due to the conduction band offset between the two materials. This barrier was found to limit the forward current in fabricated diodes. Further, we show that introducing a compositionally-graded layer between the AlN and the AlGaN reduces the interfacial barrier and increases the forward current density of fabricated diodes by a factor of 104.