When the compositions of Al2O3, SiO2 and other oxides were increased, refractive index (n) appeared to increase and extinction coefficient (k) to decrease in AlSixOy. The study of the correlation among sputtering conditions, chemical compositions and optical properties could lead to the chemical stability of AlSixOy embedded material. Bi layer AlSixOy thin film may be a new high-transmittance (T%∼35%) embedded layer of attenuated phase-shifting masks (AttPSMs) in 193 nm lithography. The transparent layer with saturation of Al2O3 and SiO2 compositions exhibits n of 2.3–2.4 and k of 0.1–0.2. The absorptive layer with higher concentrations of Al and Si exhibits n of 1.5–1.7 and k of 0.3–0.4. Combining a dark-tone mask, high-transmittance AttPSM and negative resist resulted in better contrast of the aerial image and a resolution of 0.1 µm for the contact-hole pattern in 193 nm lithography. A 0.20-µm-line/space (1:1) etched pattern was successfully fabricated using AlSixOy as an embedded layer.