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The invention provides an AlN single crystal substrate production apparatus and an application method thereof. The main body of the AlN single crystal substrate production apparatus is a high temperature resistant crucible and the crucible is divided into two parts, namely a crystal growth chamber and a raw material chamber. A gas pipe of ammonia gas or nitrogen gas or mixed ammonia gas and nitrogen gas is arranged on the sidewall of the crystal growth chamber, and a gas outlet is formed in a position opposite to the gas pipe; a substrate is fixed on the top of the reaction chamber; a carrier gas pipe is arranged at the bottom of the raw material chamber; raw materials are placed at the bottom of the raw material chamber; and the growth chamber is separated from the raw material chamber by a perforated separator. The crucible can be heated by heaters around the crucible, or directly heated by use of the crucible. According to the AlN single crystal substrate production apparatus, a large-size cheap sapphire substrate is taken as seed crystal for AlN crystal growth and the problem of expensive seed crystal of the PVT apparatus is solved; and besides, compared with halide vapor phase epitaxy (HVPE) equipment, the growth temperature of the AlN single crystal substrate production apparatus is higher and closer to the balance growth temperature of the AlN crystal, and therefore, the grown crystal is higher in quality.