Transparent AlON was pressurelessly sintered from powders synthesized by a two-step carbothermal nitridation method, using core-shell structured Al2O3/C mixture derived from the pyrolysis of an Al2O3/ureaformaldehyde-resin nanocomposite precursor as the starting material. It was found that the amorphous carbon layer on the Al2O3 particle surface could strongly retard the coalescence and growth of Al2O3 particles during the carbothermal nitridation process. As a result, the formation temperature and particle size of the AlON powder were significantly reduced. The AlON powder synthesized showed a bimodal particle size distribution at 0.2 and 0.7 μm and was well dispersed; its maximum particle size was below 0.9 μm. Under the aid of proper sintering additive, transparent AlON ceramics with an average in-line transmittance above 80% at visible to infrared range were obtained through pressureless sintering.