We report the observation for the first time of parasitic bipolar action in GaAs MESFET's. It manifests itself in the form of increased transconductance at higher drain voltage, abrupt change in output conductance (kink effect) around 4-V drain-source voltage, and a gate-voltage-dependent substrate current. These effects are explained by electron-hole pair generation in the high-field region at the drain. The holes generated are injected into the substrate where they form the base region of a parasitic lateral bipolar transistor. The effect also explains a new breakdown mechanism for short-channel enhancement-mode MESFET's.