A method and apparatus for producing AlN powder employing a vacuum chamber with a nozzle thereon having a hollow center crucible of graphite with a small feed hole in the bottom thereof. A device is provided for heating and melting aluminum in the crucible. A plasma gun connected to a source of argon and nitrogen is ignited below said feed hole, and melted aluminum moves into the plume of said plasma gun. The melted aluminum is atomized in the plume, and the droplets of aluminum are vaporized and react to the nitrogen in the plume, to create AlN which is collected in a collecting chamber.