Transparent AlON possesses good mechanical and optical properties, which shows great potential for application. However, high fabrication cost seriously restricts its wide usage. To solve this problem, gel-casting and pressureless sintering of transparent AlON was tentatively studied here, with emphasis on low temperature synthesis and anti-hydrolysis treatment of AlON powder. It was found that fine AlON powder could be readily synthesized at a low temperature of 1700 ℃ by a novel carbothermal nitridation technique, using polymer coated AlN/Al₂O₃ mixture as the starting materials. The powder obtained was submicron in size and its hydrolysis resistance could be significantly improved after surface coating with a polyurethane layer. On the basis of these findings, transparent AlON ceramics was successfully prepared through gel-casting and pressureless sintering. The material sintered at 1850 ℃ showed good optical and mechanical properties, with a high in-line transmittance of 83.1%-86.2% from ultraviolet to mid-infrared and three-point bending strength of 310 MPa.