Li-O2 batteries are considered promising electrochemical energy storage devices due to their high specific capacity and low cost. However, this technology currently suffers from two serious problems: low round-trip efficiency and slow reaction dynamics at the cathode. Solving these problems requires designing novel catalysis materials. In this study, a bilayer tetragonal AlN nanosheet as the catalyst is theoretically designed for the Li-O2 electrochemical system, and the discharge/charge process is simulated by a first-principles approach. It is found that the reaction path leading to Li4O2 is energetically more favored than the path to form a Li4O4 cluster on an AlN nanosheet. The theoretical open-circuit voltage for Li4O2 is 2.70 V, which is only 0.14 V lower than the formation of Li4O4. Notably, the discharge overpotential for forming Li4O2 on the AlN nanosheet is only 0.57 V, and the corresponding charge overpotential is as low as 0.21 V. A low charge/discharge overpotential can effectively solve the problems of low round-trip efficiency and slow reaction kinetics. The decomposition pathways of the final discharge product Li4O2 and the intermediate product Li2O2 are also investigated, and the decomposition barriers are 1.41 eV and 1.45 eV, respectively. Our work shows that bilayer tetragonal AlN nanosheets are promising catalysts for Li-O2 batteries.