High-electron mobility transistors (HEMTs) were fabricated from heterostructures consisting of undoped In0.2Al0.8N barrier and GaN channel layers grown by metal-organic vapor phase epitaxy on (0001) sapphire substrates. The polarization-induced two-dimensional electron gas (2DEG) density and mobility at the In0.2Al0.8N/GaN heterojunction were 2 x 10(13\) cm(-2) and 260 cm(2)V(-1)s(-1), respectively. A tradeoff was determined for the annealing temperature of Ti/Al/Ni/Au ohmic contacts in order to achieve a low contact resistance (pc = 2.4 X 10(-5) Omega(.)cm(2)) without degradation of the channels sheet resistance. Schottky barrier heights were 0.63 and 0.84 eV for Ni- and Pt-based contacts, respectively. The obtained dc parameters of 1-mu m gate-length HEMT were 0.64 A/mm drain current at V-GS = 3 V and 122 mS/mm transconductance, respectively. An HEMT analytical model was used to identify the effects of various material and device parameters on the InAIN/GaN REMT performance. It is concluded that the increase in the channel mobility is urgently needed in order to benefit from the high 2DEG density.