Modulation‐doped FETs grown by MBE exhibit very high currents and transconductances per unit gate width. In short gate FETs the high transconductances are a result of large electron velocities; typically 2×107cm/s at 300 K and 3×107cm/s at 77 K. Since the low field mobility does not strongly affect device performance, improvements were obtained by adjusting the parameters of the heterostructure to maximize charge transfer across the heterojunction. An improved calculation of the maximum charge transfer is used to derive closed expressions for the maximum current and transconductance. Predictions of increasing current and transconductance as the undoped (Al,Ga)As spacer layer thickness is decreased have been verified by experimental results. For aN‐off FET with a 20 Å spacer layer transconductances as high as 250 mS/mm at 300 K and 400 mS/mm at 77 K have been obtained. Maximum currents as high as 200 and 300 mA/mm were obtained inN‐off andN‐on devices, respectively, at 300 K. In this paper the crystal growth, device fabrication, and design considerations for modulation‐doped FETs are discussed.