Rare-earth (RE) doped semiconductors have found many applications in solid-state lasers, light-emitting displays and devices, and optical fiber telecommunications. Wurtzite nitrides are particularly attractive host materials due to their strong ionic bonds that can enhance the intra-4fn transition probability in the RE<SUP>3+</SUP> ion, and high thermal conductivity necessary for maximizing performance of high power/high temperature devices. In addition, it has been shown that thermal quenching decreases with increasing band gap, making the widest band gap nitride AlN an appealing host material. AlN doped with RE ions, particularly Er and Eu, has been extensively studied. However, little is known about AlN doped with Nd, which has found immense success as the dopant in solid state lasers (i.e. Nd:YAG and Nd:YVO<SUB>4</SUB>). In this paper, we report on <I>in situ</I> doping with Nd of AlN grown by plasma-assisted molecular beam epitaxy (PA-MBE). The Stark energy levels of the Nd<SUP>3+</SUP> ion in AlN are resolved by photoluminescence (PL) and photoluminescence excitation (PLE) spectroscopy. The AlN layer was grown on <I>c</I>-plane sapphire by PA-MBE and consists of an AlN buffer layer followed by a ~0.6 μm-thick Nd-doped AlN layer. The sample was cooled to ~ 13K and pumped with a continuous wave Ti:Sapphire laser tunable between 750 to 1000 nm and with an excitation power of ~350 mW. The resulting luminescence was collected into a spectrometer and onto a Ge detector. Strong emission is observed at low temperature in the PL spectrum due to transitions from the <SUP>4</SUP>F<SUB>3/2</SUB> doublet to the <SUP>4</SUP>I<SUB>9/2</SUB>, <SUP>4</SUP>I<SUB>11/2</SUB>, and <SUP>4</SUP>I<SUB>13/2</SUB> manifolds. Due to the crystal field experienced by substitutional Nd-ions at Al sites, there are a total of <I>J</I>+1/2 Stark sublevels in each manifold, where <I>J</I> is the total angular momentum. The PL peaks appear in pairs separated by 5.0 meV, indicating the splitting energy of the <SUP>4</SUP>F<SUB>3/2</SUB> doublet. The most intense emission peaks are observed from transitions to the <SUP>4</SUP>I<SUB>11/2</SUB> manifold, with the strongest emission line at 1.12 eV (1108 nm). The PLE spectrum detected at the strongest emission energy 1.12 eV (1108 nm) at low temperature shows transitions from the <SUP>4</SUP>I<SUB>9/2</SUB> ground state to the upper states <SUP>4</SUP>F<SUB>5/2</SUB>, <SUP>2</SUP>H<SUB>9/2</SUB>, <SUP>4</SUP>F<SUB>7/2</SUB>, and <SUP>4</SUP>S<SUB>3/2</SUB>. The strongest emission occurs at an excitation energy of 1.48 eV (835 nm). The energy levels of Nd in AlN are slightly shifted with respect to those which we previously measured in PA-MBE grown GaN, as evidenced by the splitting energy of the <SUP>4</SUP>F<SUB>3/2</SUB> doublet (4.2 meV in GaN versus 5.0 meV in AlN). The shifted energy levels are due to the changes in the environment experienced by the Nd ions in AlN as compared to GaN, most likely caused by differences in the crystal-field or strain with substitutional doping at the Ga or Al site.