In this study, a sol–gel method was used to synthesize Al-doped ZnO nanocrystals (AZO). For preparation of this highly concentrated sol, zinc acetate concentration was fixed at 2M. UV-visible absorption and photoluminescence spectroscopy were used to evaluate optical properties of the prepared samples. High temperature annealing was employed to evaluate the solid solubility limit of Al ions. XRD and Raman spectroscopy are then used to evaluate the doping process of aluminum in ZnO nanopowders. Disappearing of the second order Raman peak of ZnO at 1160 cm−1 was used to confirm the solid solubility limit. It can be found that the disappearing of second order Raman peak intensity at 1160 cm−1 is observed for sample with 2 at% Al3+ ion. Experimental results have shown that the solid solubility limit of aluminium ions in sol–gel derived zinc oxide nanocrystals was achieved.