We report normally-off Al2O3/AlGaN/GaN metal-isolator-semiconductor high-electron-mobility transistor (MIS-HEMT) with improved thermal stability in DC and dynamic performance. The MIS-HEMTs featuring a partially recessed (Al)GaN barrier were realized by a fluorine-plasma implantation/etch technique. Both the well-controlled slow dry etching for gate recess and implanting fluorine ions into the AlGaN barrier are carried out with CF4 plasma at a relative high RF driving power. The partially recessed barrier leads to improved thermal stability, while the fluorine implantation can convert the device from depletion-mode to enhancement-mode without completely removing the barrier and sacrificing the high mobility heterojunction channel. From room temperature to 200 °C, the device exhibits improved thermal stability with a small negative shift of VTH (∼0.5 V) that is attributed to the high-quality dielectric/F-implanted-(Al)GaN interface and the partially recessed barrier.