Preparation of Li-beta"-alumina is realized by the heterogeneous ion-exchange reaction between Na-beta"-alumina and LiCl in the solid state or melt at 800 to 930 K. The utility of Na-beta"-alumina as a template wherein Li+ ions replace Na+ from the conduction planes arises from the high reactivity of the precursor prepared by the novel wet chemical gel-to-crystallite conversion (G-C) technique. High-resolution transmission electron microscopy (HRTEM) revealed the presence of splinter fragments resulting from high density of stacking faults in Li-beta"-alumina. The decrease in intensities of (00l) reflections in powder X-ray diffraction (XRD) patterns on annealing between 873 and 1173 K is due to the intra-diffusion of Li+ from the conduction planes into the spinel blocks. gamma-LiAlO2 and LiAl5O8 are formed when Li-beta"-alumina is heated above 1273 K. Lithium aluminospinel, LiAl5O8, is the only residual phase when heated to 1673 K, which is formed as a result of the evaporation of Li2O.