This paper presents reduced dislocation of the AlGaN/GaN heterostructure for high-voltage lateral high-electron-mobility transistor (HEMT) devices. AlGaN/GaN heterostructure was grown on sapphire substrate. Prior to the growth of the AlGaN layer, the GaN layer was grown via two-step growth. In the first step, the V/III ratio was applied at 1902 and then at 3046 in the second step. The FWHMs of the XRD (002) and (102) peaks of the GaN layer were around 205 arcsec ((002) peak) and 277 arcsec ((102) peak). Moreover, the surface of the GaN layer showed clear evidence of step flows, which resulted in the smooth surface of the layer as well as the overgrown of the AlGaN layer. Subsequently, the AlGaN/GaN heterostructure was fabricated into a lateral HEMT with wide gate-to-drain length (LGD). The device exhibited a clear working HEMT characteristic with high breakdown voltages up to 497 V. In comparison to many reported AlGaN/GaN HEMTs, no AlGaN interlayer was inserted in our AlGaN/GaN heterostructure. By improving the growth conditions for the two-step growth, the performance of AlGaN/GaN HEMTs could be improved further.