To avoid potential large bending losses, the technique of high index contrast (HIC) has been developed. Silicon-oxynitride possess the priorities of the low residual stress, variations of the refractive index controlled by processing gas, and low absorption phenomena for infrared region, result in excellent promise and can provide key practical devices in dense wavelength division multiplexing (DWDM). The purpose of this study is to investigate and develop the rib shape, detail scale, reasonable selection of the waveguide material for silicon-oxynitride arrayed waveguide grating (AWG) design, processing parameters, and optical properties. Selecting index of 1.50 and 1.45 silicon-oxynitride as core and top/bottom cladding layers with reasonable design parameters represented very low loss, crosstalk, and side-lobe transmission spectral by 2D and 3D simulations. Based on the design results, we will perform the actual device fabrication. Silicon-oxynitride films optical measurements indicated, the refractive index and the extinction coefficient were 1.45~1.89 and 1x10-4~4.3x10-4 respectively by varying N2O/N2 ratio at 1550nm wavelength. From compositional analysis revealed the increased N/O ratio would increase refractive index and extinction coefficient, meanwhile the more Si-H and N-H bonds would increase extinction coefficient Microstructure analysis indicated silicon-oxynitride had amorphous structure with some voids might reduce the refractive index and reliability.