Nd-doped AlGaAs epitaxial layers were grown by liquid phase epitaxy in a sliding boat system. The surface morphologies of the epitaxial layers grown with 0-0.4 wt% Nd are very smooth and mirror-like. However, when 0.6 wt% Nd is added, many defects and a fairly rough surface are observed. According to the experimental results of secondary ion mass spectroscopy, all the Nd, Ga, Al and As elements are uniformly distributed in the Nd-doped AlGaAs layers. Besides it was observed for the first time that the content of Al increases with increasing Nd. This phenomenon is also demonstrated by the blue shift of the photoluminescence spectra. Furthermore, by Hall and capacitance-voltage measurements, it can be concluded that the residual impurities in the Nd-doped AlGaAs layers can be effectively gettered by adding Nd dopant.