Recently, the ability to create bio-semiconductor hybrid devices has gained much interest for cell activity analysis. AlGaN material system has been demonstrated to be a promising cell-based biosensing platform due to a combination of unique properties, such as chemical inertness, optical transparency and low signal to noise ratios. To investigate the potential application of hybrid cell-AlGaN/GaN field effect transistor for cell electrophysiological monitoring, saos-2 human osteoblast-like cells were cultured in high density in non-metallized gate area of a transparent AlGaN/GaN heterostructure field effect transistor. We implemented and characterized the transistor recording of extracellular voltage in the cell-chip junction using the FET chip. The effect of ion channel blocker TEA on transistor signal was explored in order to test the capability of this hybrid chip for in vitro drug screening bioassay. Finally, the effect of cell adhesion on transistor signal was also studied by applying the protein kinase inhibitor H-7.