The alpha- and beta-SiAlONs are ceramic solid solutions with charge-neutral substitutions in alpha- and beta-Si3N4. They have high potential for applications as structural materials. We have calculated the electronic structure and bonding of beta-Si6-zAlzOzN8-z, for z = 0, 1, 2, 3, 4 using a first-principles method. Total energy calculations show that the bulk modulus of beta-Si6-zAlzOzN8-z decreases as z increases, in general agreement with experimental trends. Simultaneous substitution of the (Si,N) pair by (Al,O) results in impurity-like states in the upper portion of the bandgap of beta-Si3N4. As z increases, more and more states are introduced into the gap, forming a new conduction band (CB) edge for SiAlON. At z = 4, the calculated bandgap is similar to 1.3 eV. Density of states (DOS) calculations show the top of the valence band remains steep for all z, and the bottom of the CB is formed predominately by Si-O antibonding states. Orbitally resolved partial DOS calculations in the CB region are used to predict the trends of the electron-energy-loss near-edge spectra (ELNES) of Si-L-2.3, Al-L-2.3, Si-K, Al-K, O-K, and N-K edges in beta-SiAlON. The impurity-like states near the CB edge result in pre-edge structures in all ELNES spectra, Effective charge and bond order calculations show that the overall bond strength in beta-SiAlON decreases only slightly as z increases. Although the stronger Si-N bonds are replaced by weaker Al-O bonds, the remaining Si-N and Al-O bonds actually strengthen as z increases because of the effective charge redistribution after substitution. This is a very interesting finding that may partly explain the superior mechanical properties of the SiAlON system that render them suitable for structural applications.