The transition behavior of coarse AlN during cold rolling in the low-temperature grain-oriented silicon steel normalized sheet was investigated using field emission scanning electron microscopy (SEM) and field emission transmission electron microscopy (TEM). The SEM observation results showed that the size of AlN decreased with the increase of the cold rolling reduction rate, and the average sizes of AlN in the normalized specimen and the cold-rolled specimens with the cold rolling reduction rates of 14%, 23%, 30%, 40%, and 89% were approximately 1734, 771, 742, 582, 490, and 96 nm, respectively. The morphology of AlN nearly transformed from rectangle to irregular polygon when the cold rolling reduction rate exceeded 23%. Meanwhile, the mechanism of the refinement of AlN during cold rolling was characterized by TEM. The high-resolution transmission electron microscopy (HRTEM) analysis results confirmed that the refinement of coarse AlN during cold rolling was caused by the shear effect of dislocation slip because lots of slip traces, which were produced by dislocation slip along some slip systems of AlN, such as (011‾0)[21‾1‾0], (01‾11)[21‾1‾0], and (0001)[21‾1‾0] slip systems, were observed in AlN. Moreover, it was also found that after a coarse AlN was sheared to become two parts, the orientations of them would be slightly different when the slip plane of AlN was not completely parallel to that of the matrix before shearing. Therefore, based on these results, it was confirmed for the first time that the coarse AlN precipitated in low-temperature grain-oriented silicon steel normalized sheet was shearable and could be refined after cold rolling. The possible mechanisms were summarized as follows: the orientation relationship between AlN and matrix might be randomly changed during cold rolling owing to the considerable stress concentration around AlN, making it possible that the slip plane of AlN matched with that of the matrix, at this time, the dislocations slipping in the matrix could glide into and shear AlN with the slip system of matrix changing into the slip system of AlN.