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AlGaN/GaN high electron mobility transistors (HEMTs) are in high demand for wireless communication and power conversion applications due to their high-power and high-frequency capabilities. However, the extremely high operational heat flux often leads to the formation of hotspots that negatively impact the device performance and reliability. In this work, an AlGaN/GaN HEMT with a transparent indium tin oxide (ITO) gate was fabricated to enable in situ characterization of the channel peak temperature that occurs underneath the gate electrode. Raman thermometry was performed to measure the temperature of the GaN layer under various bias conditions while power dissipation was kept constant. An electro-thermal device model was created to validate experimental results, to explain the physical origins of the bias-dependent self-heating behavior, and to calculate the peak temperature of the two-dimensional electron gas channel. Experimental results show that the temperature measured next to the drain side edge of the gate (which is a normal practice when characterizing a standard metal-gated device) resulted in a 32% lower value than the temperature underneath the drain end of the gate acquired from the ITO-gated device. This underestimation of temperature could result in overestimation of the component lifetime during accelerated operational life tests.