Particulate nitride composites have been fabricated by sintering the compacted powder of AlN and 5 - 64.3 mol% $Al_2O_3$, with a small addition of $Y_2O_3$ ($Y_2O_3$/AlN, 1 wt%), in 1-atm nitrogen gas at $1650-1900^{circ}C$. The composites were characterized in terms of sintering behavior, phase relations, microstructure and thermal shock resistance. AlN, 27R AlN pseudopolytype, and alminium oxynitride (AlON, $5AlN{cdot}9Al_2O_3$) were found to existin the sintered material. Regardless of batch composition, the AlN-$Al_2O_3$ powder compacts exhibited similar sintering behavior; however, the degree of shrinkage commonly increased with increasing $Al_2O_3$ content, consequently giving high sintered bulk density. By increasing the $Al_2O_3$ addition up to ${geq}50 mol%$, the matrix phase in the sintered material was converted from AlN or 27R to AlON. Above $1850^{circ}C$, a liquid phase was formed by the reaction of $Al_2O_3$ with AlN, aided by $Y_2O_3$ and mainly existed at the grain boundaries of AlON. Thermal shock resistance was superior in the sintered composite consisting of AlON with dispersed AlN or AlN matrix phase.