The preparation of the γ-AlON ceramics has been carried out by a reaction sintering process. Mixed powder compacts consisting of Al2O3 and AlN were heated in N2. The lattice parameters of the γ-AlON, which were obtained from the compacts by heating at 1850°C for 2h, linearly changed from 0.7939 to 0.7953nm for the composition range from 68 to 78mol% Al2O3 in the starting mixture. Dense γ-AlON ceramics were obtained by sintering the compact with Y2O3, however their bending strength was lower than that of specimens without Y2O3. γ-AlON ceramics with various N/O ratio, prepared from 0.25mass% Y2O3-containing compacts with various ratio of Al2O3 and AlN, were characterized with respect to their mechanical properties. Young's modulus increased slightly with increase of N/O ratio. The relation between N/O ratio and bending strength, Vickers hardness and thermal expansion coefficient were of difficult interpretation. The oxidation behavior of γ-AlON ceramics in air was also investigated. γ-AlON ceramics were little oxidized below 1200°C. At 1300°C, the oxidation of γ-AlON ceramics was accelerated, because the cracks along the surface occurred in the oxidized layer.