The surface properties of n-type AlxGa1−xN (x=0-0.5) exposed to inductively couple plasma were studied systematically using metal contact measurements and X-ray photoelectron spectroscopy (XPS). Cl2/BCl3 and Ar plasma treatment considerably increased the surface conductivity of AlxGa1−xN (x<0.3) and thus improved the characteristics of Ti/Al-based ohmic contacts, but degraded the surface and contact properties of AlxGa1−xN (x≥0.3). XPS measurements revealed a significant increase in oxygen incorporation and energy shifts of the core-level spectra in plasma-treated samples. In contrast to an upward shift of the surface Fermi level in plasma-treated GaN, the surface Fermi level moved away from the conduction band in Al0.5Ga0.5N upon plasma treatment. These findings suggest that the nature of plasma damage in AlGaN appears to be a function of the Al mole fraction. Plasma-induced defects in high-Al AlGaN may act as deep-level compensation centers, degrading the surface electrical properties and contact characteristics.