In this letter, the physical effects of the local surface thin thermal oxidation on the current transport in AlGaN∕GaN heterostructures are reported. Current-voltage measurements performed on appropriate test patterns demonstrated that a selective oxidation process at 900°C enables the suppression of the current flow through the two-dimensional electron gas. The electrical insulation was achieved even though structural analysis showed that the formed oxide did not reach the depth of the AlGaN∕GaN heterointerface. The combination of capacitance-voltage measurements with depth-resolved scanning capacitance microscopy enabled to correlate the electrical results to the doping and the compositional stability of the material during oxidation.