The generation of nonclassical states of light in miniature chips is a crucial step toward practical implementations of future quantum technologies. Semiconductor materials are ideal for achieving extremely compact and massively parallel systems and several platforms are currently under development. In this context, spontaneous parametric downconversion in AlGaAs devices combines the advantages of room temperature operation, possibility of electrical injection, and emission in the telecom band. Here we report on a chip-based AlGaAs source, producing indistinguishable and energy-time entangled photons with a brightness of 7.2×106 pairs/s and a signal-to-noise ratio of 141±12. Indistinguishability between the photons is demonstrated via a Hong–Ou–Mandel experiment with a visibility of 89±3%, mainly limited by the reflectivity of the chip facets, while energy-time entanglement is tested via a Franson interferometer leading to a visibility of 96±4.