The synthesis of aluminum nitride (AlN) powders from aluminum (Al) particles via a thermal nitridation process was carried out at high temperature (>900 °C) with a long reaction time (∼several hours). This study proposes a two-stage plasma-chemical synthesis process to efficiently minimize the agglomeration of Al particles, reduce the reaction time and temperature, and promote the formation of AlN powders. In the first stage, partially nitrided Al powders were produced at temperatures lower than 600 °C in atmospheric-pressure microwave N2 plasma. The particle size of the as-prepared powders was similar to that of the original Al powders. In the second stage, the reaction temperature was increased to 700–800 °C and the reaction time was less than 5 min in N2 plasma. Well-dispersed AlN powders with almost no agglomeration were produced. Moreover, the particle size was lower than that of the original Al.