To address the thermal challenges of three-dimensional integrated circuits, we explored the film properties and integration of AlN with high thermal conductivity as a novel interlayer dielectric in a back-end-of-line process. We found for the first time that the residual stress can be controlled by optimizing sputtering pressure without degrading the out-of-plane thermal conductivity, which is critical for the practical utilization of AlN as a dielectric film. The Cu diffusion coefficient in the AlN film was confirmed to be significantly lower than that in a SiO2 film, indicating the feasibility of using AlN films without a barrier metal. In addition, by examining other potential challenges such as adhesion and chemical stability, we successfully demonstrated a Cu damascene process with the AlN interlayer dielectric.