An interesting Pd/oxide/AlGaAs metal oxide semiconductor (MOS) junction resistor-type hydrogen sensor, based on the current-voltage characteristics in the linear region of an AlGaAs-based PHEMT structure, is fabricated and studied. A simple model is employed to elucidate the hydrogen detection mechanism. The dissociation of H2, diffusion of H atoms and formation of a dipole layer cause a significant decrease in channel resistance. Experimental results show that the VGS bias significantly affects the resistance sensitivity, conductance variation, current variation, transient response, and response time. At 30°C, a significant resistance response of 33.3% (82.8%) to 4.3 (9970) ppm H2/air is obtained at VGS=-0.6 V. Nevertheless, the largest conductance variation (ΔG) appears to be in the range between VGS=-0.3 and -0.4 V. The transient response at V GS=-0.3 V shows larger current variations, accompanying the longer response time than those at VGS=0 V.