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Here we report on the non-hydrothermal aqueous synthesis and characterization of nanocrystalline lithium aluminum iodate, LiAl(IO3)4. Morphological and compositional analyses were carried out by using scanning electron microscopy (SEM) and energy-dispersive X-ray measurements (EDX). The optical and vibrational properties of LiAl(IO3)4 have been studied by UV-Vis and IR spectroscopy. LiAl(IO3)4 is found to crystallize in the non-centrosymmetric, monoclinic P21 space group, contrary to what was reported previously. Theoretical simulations and Rietveld refinements of crystal structure support this finding, together with the relatively high Second Harmonic Generation (SGH) response that was observed. Electronic band structure calculations show that LiAl(IO3)4 crystal has an indirect band gap Egap=3.68 eV, in agreement with the experimental optical band gap Egap=3.433 eV. The complex relative permittivity and the refraction index of LiAl(IO3)4 have also been calculated as a function of energy, as well as its elastic constants and mechanical parameters. LiAl(IO3)4 is found to be a very compressible and ductile material. Our findings imply that LiAl(IO3)4 is a promising material for optoelectronic and non -linear optical applications.