We have successfully obtained high temperature (>400K) ferromagnetism in nitride-based diluted magnetic semiconductor (DMS) GaGdN ternary alloy. This is to our knowledge, the first report of room-temperature ferromagnetism in DMS using rare-earth element. GaGdN layer were grown on the (0001) Si-face of SiC substrate by RF-plasma-assisted molecular-beam epitaxy. Ga 0 . 9 4 Gd 0 . 0 6 N showed the band-edge emission at 370nm in room-temperature cathodoluminescence, and a ferromagnetic behavior with a Curie temperature higher than 400K. Hysteresis was observed in the magnetization versus magnetic field curves at all measuring temperatures from 7 to 400K.