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By gm
#190947
Make sure you have the drain and source hooked up correctly. You might be seeing the body diode voltage drop.
By UhClem
#190950
It seems likely that you are using this as a high side switch without a high side driver.

An N channel MOSFET will be on if the gate voltage is greater than the source voltage by its threshold voltage. So if you connect the drain to +5V the source will never be higher than +5V minus the threshold voltage. This is a logic level device with a low threshold voltage so 3.5V is about right.
By webmastadj
#190951
So what I am seeing is normal behavior? So if I had say a 50v source I would see a min of 47.5v?

The GATE is connected to the 9pin on the Arduino (5v high), the DRAIN is connected to the external power source 5v+. The SOURCE is connected to the common ground of the Arduino and external power source ground. Trying to control a light with the MOSFET.
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By darrellg
#190963
For an N-Channel MOSFET, the proper use is to connect the Source directly to ground and place the load (your light) between the Drain and 5V. Connect the Gate to the Arduino. It's probably a good idea to have a pull-down resistor on the gate as well.