γ-aluminum oxynitride (γ-ALON) powder was prepared by carbothermal reduction method using γ-Al2O3 and activated carbon as raw materials. Effects of activated carbon content, synthesizing temperature, holding time and carbon impurity on ALON powder were studied. It was found a ‘two-step’ procedure, first sintering at about 1550°C-1650°C then at about 1750°C-1850°C, was effective to prepare high-purity ALON powder. The removal of carbon impurity was crucial for the preparation of ALON powder, which effectively improved the purity of ALON powder. The prepared powder was characterized by XRD and SEM, which indicated that pure ALON powder prepared by a ‘two-step’ procedure had well-developed crystalline and homogenous granularity. Transparent ALON ceramics were prepared by hot-press sintering at 1850~1900°C for up to 2~4h using ALON powder and some sintering additive, the transmission of sample with thickness of 1mm was 81% at infrared wave.