AlN has successfully been applied to passivate the oxide/III–V interface; however, it changes both the metal work function (WF) and band alignment of the gate-stack and, thus, affects the power consumption of the devices. We found that the AlN layer induces a dipole $\delta = 0.18$ eV between HfO2 and substrate. The dipole value obtained from capacitance–voltage characteristics performs good agreement with the results of X-ray photoelectron spectroscopic measurements. The effective WF of Ni is found to be 5.55 eV, which is larger than its WF in vacuum. The valance band offset and the conduction band offset of HfO2 with AlN/In0.53Ga0.47As are found to be 2.82 and 2.06 eV, respectively.