YAG precursors were co–precipitated from a mixed solution of aluminum and yttrium nitrates using urea as precipitant. After being washed by ethanol several times, the gel–like precursor was dispersed in absolute ethanol to form suspended liquid. The mixture was placed into a high–pressure autoclave, which followed by heating ethanol to supercritical state (Tc > 243°C and Pc > 6.3Mpa). The precursor dried via supercritical ethanol fluid technique was sintered at different temperature according to requirement. The phase transformation, composition and micro–structural features of the products were characterized by XRD, TG/DSC, BET and TEM techniques. It was found that after supercritical ethanol fluid drying the precursor was well dispersed, uniform and caused better sinterability of the resultant YAG powder. XRD results indicated that the precursor was partial crystalline and the pure phase YAG can be obtained at 1200°C calcinated for 2h. TG/DSC revealed the formation process of YAG phase. The averaged size of YAG nanocrystalline powder was 30–40nm and well dispersed according to TEM.