The synthesis of pure and well dispersed lutetium aluminum garnet (LuAG) powder is crucial and important for the preparation of LuAG transparent ceramics. In this paper, high purity and well dispersed LuAG powders have been synthesized via co-precipitation method with lutetium nitrate and aluminum nitrate as raw materials. Ammonium hydrogen carbonate (AHC) was used as the precipitant. The influence of aging time, pH value, and dripping speed on the prepared LuAG powders were investigated. It showed that long aging duration (>15 h) with high terminal pH value (>7.80) resulted in segregation of rhombus Lu precipitate and Al precipitate. By decreasing the initial pH value or accelerating the dripping speed, rhombus Lu precipitate was eliminated and pure LuAG nano powders were synthesized. High quality LuAG transparent ceramics with transmission >75% at 1064 nm were fabricated using these well dispersed nano LuAG powders.