The applicability of the group III nitride material system for the fabrication of semiconductor-based biosensors is demonstrated. The operation of ion-sensitive field-effect transistors (ISFETs) based on AlGaN/GaN heterostructures in aqueous electrolytes is shown to be characterized by high sensitivity and low drift. Fibroblasts in contact with oxidized and as-deposited AlGaN surfaces are demonstrated to survive at least for 24 h, indicating that these surfaces are chemically robust and non-toxic against living cells. Surface hydrophilization using thermal oxidation allows the deposition of highly mobile lipid membranes by vesicle fusion. The homogeneity and the diffusion properties of phospholipids with different net charges were analyzed by fluorescence microscopy and constant photobleaching, taking advantage of the optical transparency of the AlGaN material system. The obtained results reveal that AlGaN-based devices are promising candidates for future multifunctional biosensors.