The preparation condition, microstructure, and morphology of ultrafine Al and AlN particles were examined by a combined technique of nitrogen plasma-aluminum reaction and spray deposition as well as by metallographic techniques. The Al and AlN particles have the morphologies of sphere and hexagonal plate, respectively, and the particle size is 5 to 200 nm for Al and 20 to 120 nm for AlN. The volume ratio of AlN to Al increases continuously with an increase of the mixing gas ratio of nitrogen to argon and the total pressure of nitrogen and reaches about 25% in a nitrogen atmosphere with a pressure of 93 kPa. The composite Al-AlN particles are also observed and have an orientation relationship of (111)Al//(001)AlN, [101̄] Al//AlN, and [12̄1]Al//[11̄0] AlN, in which the lattice misfit is as small as 6.4%, 8.6%, and 8.6%, respectively. The formation of the composite particles is presumed to result from the collision and incorporation of Al particles with the AlN plate adhered to Al particles. The Al and AlN particles produced by the present method are concluded to be small and homogeneous enough to be used as raw materials for the production of nanoscale composites and compositionally gradient materials.