In this paper, we analyze the performance of a full-duplex (FD) amplify-and-forward (AF) relay system with imperfect hardware. Besides the aggregate hardware impairments of the imperfect transceiver, we also consider the impact of residual self-interference (RSI) due to imperfect cancellation at the FD relay node. An analytical framework for analyzing the system performance including exact outage probability (OP), asymptotic OP, and approximate symbol error probability (SEP) is developed. In order to tackle these impacts, we propose an optimal power allocation scheme which can improve the outage performance of the FD relay node, especially at the high signal-to-noise ratio (SNR) regime. Numerical results are presented for various evaluation scenarios and verified using the Monte Carlo simulations.