A low damage dry etch process has been developed for the gate recess of AlGaAs/GaAs heterostructure field effect transistor (HFET) with a selectivity of the etch rates greater than 750:1. The reactive ion etching induced damage has been compared to that reported from other etch processes in literature by the means of photoluminescence (PL) emission from multiple quantum well structures. Better resolution in amount and depth of created defects is obtained by PL measurements of undoped heterostructure layers. The temperature dependent Hall mobility μHand sheet carrier concentrationnsof a doped heterostructure layer which directly correspond to the HFET device properties are evaluated in the dark and under illumination. Values of 360.000 cm2/V s for μHand 8.6×1011cm−2fornsat 15 K after the etch process show that a residual damage can be neglected.