160 keV Ar+ ions were homogeneously implanted in AlGaN at room temperature for device isolation purposes. Resonance Raman spectroscopy and DC electrical measurements were used to monitor the structural and electrical changes of the non-annealed and annealed implanted AlGaN samples with a dose ranging from 3.4 × 1012 to 1 × 1016 ions cm-2. The annealing was carried out at 900 °C for 40 s, these conditions being necessary to achieve good Ohmic contacts. On increasing the implantation dose from 3.4 × 1012 to 3.4 × 1014 ions cm-2, an increase in the electrical isolation and a decrease in the photoluminescence (PL) were observed. For the highest dose, the implanted layer becomes conductive, probably due to a hopping mechanism. After annealing, the implanted samples become conductive and the PL reappears or increases as compared to the non-annealed samples using the same implantation doses. Then, it is possible to obtain good device electrical isolation by implanting ions with a 3.4 × 1014 cm-2 dose subsequently to the annealing process necessary to achieve Ohmic contacts.