We report a theoretical and experimental investigation of Cr-doped AlN. Density functional calculations predict that the isolated Cr t2 defect level in AlN is 1/3 full, falls approximately at midgap, and broadens into an impurity band for concentrations over 5%. Substitutional Al1-xCrxN random alloys with 0.05≤x≤0.15 are predicted to have Curie temperatures over 600 K. Experimentally, we have characterized and optimized the molecular beam epitaxy thin film growth process, and observed room temperature ferromagnetism with a coercive field, Hc, of 120 Oe. The measured magnetic susceptibility indicates that over 33% of the Cr is magnetically active at room temperature and 40% at low temperature. © 2003 American Institute of Physics.