Elemental mixture of Ti, Al and C was high energy milled in a planetary ball mill under high-purity nitrogen gas protection and then hot pressed. The fully dense bulk layered ternary Ti2AlN0.5C0.5 with sub-micron grain size was successfully obtained. The phase formation and transformation in high energy milling and subsequently hot press sintering were studied in detail by using X-ray diffraction (XRD). Scanning electron microscopy (SEM) linked with energy dispersive spectroscopy (EDS) was used for the structural and compositional analysis. The formation mechanism was also discussed.