The low-resistance ohmic contact NiAu/ p-type AlGaN/GaN was carefully investigated by high resolution electron microscope (HRTEM) and X-ray photoelectron spectroscopy (XPS) after two-step annealing at 550°C and 750°C. It is shown that complicate double-direction diffusion and reaction occurred in the metal layer and underlying GaN layer. The four metal stacks of Ni/Au/Ni/Au turned into almost one layer and an intimate relationship established at NiAu/GaN boundary which should play a primary role in ohmic contact to low the contact barrier. A great part of the Ni atoms are oxidized and the oxide NiO is dispersive in metal layer which has an obvious effect to hinder Ga atoms emigrating upward. At the intimate interface, the metal layer close to the contact enriched with Ga and Au and the GaN upper layer metalized by Au and Ni. These characteristic may further low the contact barrier. Dislocations connected with the contact boundary absorbed interstitial atoms of Au or Ni may serve as channels for current carrier transportation as well.