Contact property is now becoming to be a key factor for achieving high performance and high reliability in GaN-based III-V semiconductor devices. Energetic ion sputter, as an effective interface probe, is widely used to profile the metal/GaN contacts for interfacial analysis and process optimization. However, the details of ion-induced interfacial reaction, as well as the formation of sputter by-products at the interfaces are still unclear. Here by combining state-of-the-art Ar+ ion sputter with in-situ X-ray photoelectron spectroscopy (XPS) and ex-situ high resolution transmission electron microscopy (HRTEM), we have observed clearly not only the ion-induced chemical state changes at interface, but also the by-products at the prototypical Ti/GaN system. For the first time, we identified the formation of a metallic Ga layer at the GaOx/GaN interface. At the Ti/GaOx interface, TiCx components were also detected due to the reaction between metal Ti and surface-adsorbed C species. Our study reveals that the corresponding core level binding energy and peak intensity obtained from ion sputter depth profile should be treated with much caution, since they will be changed due to ion-induced interface reactions and formation of by-products during ion bombardment.