Dislocations around precipitates in undoped AlGaN were investigated by transmission electron microscopy. The dislocation images were taken under different diffraction conditions. The dislocations are classified into two types, a pure edge dislocation loop and a close-coiled helical dislocation. Both types of dislocations were found to depend on the shape and size of the precipitate sources. It is suggested that the pure edge dislocation loop results from homogeneous shear stress and the close-coiled helical dislocation is caused by spherically symmetrical stress concentration at round ends of the precipitates and chemical force due to defect concentration change.