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We fabricated a 0.25 μm gate length AlGaN/GaN heterostructure field effect transistor (HFET) with a maximum extrinsic transconductance of 27 mS/mm (at room temperature) limited by the source series resistance. The device exhibited an excellent pinch‐off and a low parasitic output conductance in the saturation regime. We measured the cutoff frequency f_T and the maximum oscillation frequency f_max as 11 and 35 GHz, respectively. These values are superior to the highest reported values for field effect transistors based on other wide band‐gap semiconductors such as SiC. These results demonstrate an excellent potential of AlGaN/GaN HFETs for microwave and millimeter wave applications.