Hexagonal prism-like Al-doped ZnO nanorods were prepared by a coprecipitation method followed by annealing. The effects of Al doping and annealing atmosphere on microstructure and optical properties were studied. X-ray diffraction (XRD) results show that the Al-doped nanorods have a pure hexagonal wurtzite structure and good crystallinity. Field emission scanning electron microscope (FESEM) and transmission electron microscope (TEM) experiments confirm the rod morphology, single crystal and a-axis preference growth of Al-doped ZnO. Energy Dispersive X-Ray Spectroscopy (EDX), Raman and UV-VIS-NIR spectra analyses indicate the successful substitutional doping of Al in the ZnO lattice. Diffuse reflectance at near-ultraviolet and visible wavelengths analyses indicate the suppression of the optical absorption for Al-doped ZnO compared to pristine ZnO, which may be related to the resistance to color center formation. The optimal optical properties Al-doped ZnO nanorods (high near-infrared absorption and no formation of the yellow coloration) are reached by combining H-2 atmosphere annealing with Al doping.