<p>Aluminum nitride (AlN) in secondary aluminum dross (SAD) undergoes hydrolysis under humid conditions, releasing NH₃ that poses considerable ecological and human health risks. This study introduces an innovative resource recovery approach for SAD via electric arc smelting technology. Utilizing coke powder as a reductant within a direct-current arc furnace achieves simultaneous high-efficiency environmentally benign conversion of AlN and recovery of high-value products. The process entails: co-melting a homogenized mixture of coke powder and SAD, followed by product cooling and zonal characterization that include A. Top Electrode Zone, B. Crucible Sidewall Zone, and C. Crucible Bottom Zone, employing multi-dimensional analytical techniques to elucidate AlN transformation mechanisms and impurity element migration pathways. Results demonstrate Aluminum nitride is transformed into γ-AlON (Al₅O₆N, spinel structure) and 21R-AlON (Al₇O₃N₅, wurtzite structure) in the high-temperature zone at the bottom of the crucible mainly through a dual-path mechanism of liquid–solid reaction and vapor deposition, with a conversion rate of 95.04%. Impurities exhibit distinct migration behaviors: SiO₂ undergoes carbothermic reduction to metallic silicon (Si) accumulating in the bottom zone, KCl volatilizes directly into flue gas systems, while K₂O—generated from potassium hexaaluminate (KAl₁₁O₁₇) decomposition—reduces to potassium vapor ascending to cooler zones where it reacts with Al₂O₃ and O₂ reforming complex oxides. This technology offers an industrially viable strategy for synergistic pollution control and value-added utilization of SAD.</p> Graphical Abstract <p></p>