As a ceramic with high economic value, aluminum nitride possesses high thermal conductivity, excellent electrical insulation, high mechanical strength and high melting temperature and these all are required in high technologies involving cooling, insulation, thermal expansion and corrosion. This paper deals with thermodynamic parameters which affect the Al2O3→AlN reduction efficiency during a carbothermal reduction. According to the carbothermal reduction reaction γ-Al2O3 + 3C + N2 → AlN + 3CO, if molar mixing ratio of γ-Al2O3:C = 1:3 at 1,601 °C or higher, the γ-Al2O3 can be reduced to AlN. This carbothermal reduction reaction is controlled by main parameters of carbon activity, and partial pressures of nitrogen, carbon monoxide and carbon dioxide. For example, if less carbon is added, a lower carbothermal reduction rate is resulted; however, if extra carbon is added, aluminum carbide (Al4C3) could be produced, or C could remain in AlN. Without N2(g) added in the carbothermal reduction, Al2O3(γ) may react with C to generate Al4C3 at a temperature higher than 2,250 °C. AlN prefers to form with an unity carbon activity, at a lower oxygen partial pressure, a higher carbon monoxide partial pressure, or at a higher temperature. In order to understand the relationship with N2, O2, CO, CO2, C, Al2O3, AlN and Al4C3, the Al-N-C-O system was investigated by thermodynamic calculations.