A highly selective reactive ion etching (RIE) process based on HBr plasma has been demonstrated for the removal of InGaAs on InAlAs over a wide range of plasma self-bias voltages. Etch selectivities of 160 at −100 V and 50 at higher voltages up to −300 V have been obtained. It is shown with the aid of x-ray photoelectron spectroscopy analysis that the surface residues on the etched structures can be removed by a simple treatment in dilute HCl. No incorporation of impurities from the plasma, such as hydrogen and bromine, was detected by secondary ion mass spectroscopy analysis in samples treated in RIE up to −150 V. No degradation in mobility and sheet carrier density of the two-dimensional electron gas was observed in modulation-doped InAlAs/InGaAs field-effect transistor (FET) structures, at low self-bias voltages. The dc and rf device parameters of FETs fabricated using RIE as the gate-recess process compare favorably with those of corresponding devices fabricated using a selective wet-etching process.