Dense sialon ceramics along the tie line between Si 3 N 4 and Nd 2 O 3 ·9AlN were prepared by hot‐pressing at 1800°C. The materials were subsequently heat‐treated in the temperature range 1300–1750°C and cooled either by turning off the furnace (yielding a cooling rate (T cool ) of ∼50°C/min) or quenching (T cool ≥ 400°C/min). It was found necessary to use the quenching technique to reveal the true phase relationships at high temperature, and it was established that single‐phase α‐sialon forms for 0.30 x 0. 51 in the formula Nd x Si 12–4S x Al 4.5 x O 1. 5 x , N 16–1.5 x . The α‐sialon is stable only at temperatures above 1650°C, and it transforms at lower temperatures by two slightly different diffusion‐controlled processes. Firstly, an α‐sialon phase with lower Nd content is formed together with an Al‐containing Nd‐melilite phase, and upon prolonged heat treatment thus‐formed α‐sialon decomposes to the more stable β‐sialon and either the melilite phase or a new phase of the composition NdAl(Si 6‐z Al z )N 10‐z O z . Nd‐doped α‐sialon ceramics containing no crystalline intergranular phase show very high hardness (HV10 = 22. 5 GPa) and a fracture toughness ( K lc = 4.4 MPa·m 1/2 ) at room temperature. The presence of the melilite phase, which easily formed when slow cooling rates were applied or by post‐heat‐treatment, reduced both the fracture toughness and hardness of the materials.