Aqueous colloidal processing of magnesium aluminate spinel (MAS) is cumbersome due to its basic nature which induces hydrolysis leading to poor solid loading. In order to address this issue, an attempt has been made to develop a simple and effective thermal passivation process by calcining the powder in the temperature ranging from 1100 to 1350 °C without affecting sintering kinetics. Powder under uncalcined (MAS-UC) and calcined (MAS-C) conditions were characterized for its physico-chemical properties and slurries were prepared using these powders in aqueous medium. The rheological behaviour and zeta potential of the slurries were correlated with optimum dispersant concentration. The solid loading of the slurry could be increase by 16% as a result of thermal passivation obtaining a maximum of 65 wt% for MAS-C. The rate of cast formation is found to be higher with MAS-C1350 with the maximum green density of 53% theoretical density (TD). Further, the pressure-less sintering temperature was optimized based on the dilatometric studies and a sintered density of 3.54 g/cm3 (99% TD), which, on hot isostatic pressing, resulted in ~100% TD and after optical polishing sample exhibited close to theoretical transmission of 80–86% in the 3–5 μm wavelength. Thermal passivation is found to be a simple and effective process for MAS powder processing to transparent ceramic parts, as demonstrated in the current study.