Crack-free AlGaN with an Al content of 0.51 was successfully fabricated on selective-area-growth (SAG) GaN. To avoid the coalescence of the lateral overgrown GaN, the growth process of SAG-GaN was accurately controlled by in situ monitoring. Transmission electron microscopy (TEM) measurement demonstrated that the threading dislocations (TDs) disappeared from the SAG-GaN layer and appeared in the interface of SAG-GaN and AlGaN. Furthermore, the TDs in the AlGaN layer were mainly pure edge-type dislocations and the TD density of the AlGaN layer was about 1–3×10 8 cm −2 .