In a previous study, an aluminum nitride (AlN) layer was formed below the melting point of aluminum (Al) on the surface of an Al substrate (JIS-A1050) in a barrel with alumina/aluminum-magnesium alloy powder which activates the substrate in the nitrogen atmosphere. In this study, the mechanism of formation of AlN in the barrel was examined. AlN formation requires an incubation period. During the incubation period, a white region on the surface is observed by the optical microscopy. The Electron Probe Micro Analyzer (EPMA) show that this region contains magnesium (Mg). It seems that Mg penetrates and diffuses from the filled Al-Mg powder in the barrel. After that, the nitride is partially generated at the surface of the Al substrate, and it grows with the substrate surface. The AlN layer thickness increases proportionally with the square root of time, and it has good adhesion.