A novel fabrication profess of AlN ceramics via aqueous colloidal processing and pressureless sintering has been presented. The chemical stability of AlN powder in water was improved by the surface chemical modification with sebacic acid, while maintaining a hydrophilic surface. The treatment of the sebacic acid-modified powder with yttrium acetate tetrahydrate resulted in strong immobilization of Y3+ ions, as a sintering aid, at a highly dispersive level on the AlN powder surface through ion exchange with the free carboxyl groups of the sebacic acid molecules attached to the AlN surface. By selecting slip compositions for a well-deflocculated condition and firing conditions to burn out organic components in the slip cast compacts, a thermal conductivity of about 250 W/(m.K) could be attained by the pressureless sintering at 1900 degreesC for 5 h.