The aluminothermic reduction and nitridation method using microsized Al powder and nanosized alumina powder was employed to fabricate AlON powder under N 2 atmosphere. Single-phase aluminum oxynitride (AlON) can be prepared at a relatively low temperature (1700 °C) with a holding time of 3 h. The powder is ball milled, doped with different amounts of Y 2 O 3 (0.1–0.9 wt%) as a sintering additive, and then shaped into pellets. The pellet sintering is carried out at two relatively low temperatures (1860 and 1880 °C) for 10 h. The transmittance and hardness of the obtained samples varies as the amount of Y 2 O 3 varies. The sample sintered under optimal conditions can reach an ultimate transmittance of 65% with 2 mm thickness. The Vickers hardness of highly transparent AlON ceramic is about 15.95 6 0.17 GPa, indicating that our method has a promising future in transparent AlON ceramic production. The sintering promoting mechanisms of Y 2 O 3 are also discussed in detail.