A new circumstellar molecule, the radical AlO (X 2Σ+), has been detected toward the envelope of the oxygen-rich supergiant star VY Canis Majoris (VY CMa) using the Arizona Radio Observatory (ARO). The N = 7 → 6 and 6 → 5 rotational transitions of AlO at 268 and 230 GHz were observed at 1 mm using the ARO Submillimeter Telescope (SMT) and the N = 4 → 3 line was detected at 2 mm using the ARO 12 m telescope. Based on the shape of the line profiles, AlO most likely arises from the dust-forming region in the spherical outflow of VY CMa, as opposed to the blue or redshifted winds, with a source size of θ s ~ 0farcs5. Given this source size, the column density of AlO was found to be N tot ~ 2 × 1015 cm-2 for T rot ~ 230 K, with a fractional abundance, relative to H2, of ~10-8. Gas-phase thermodynamic equilibrium chemistry is the likely formation mechanism for AlO in VY CMa, but either shocks disrupt the condensation process into Al2O3, or chemical "freezeout" occurs. The species therefore survives further into the circumstellar envelope to a radius of r ~ 20 R *. The detection of AlO in VY CMa is additional evidence of an active gas-phase refractory chemistry in oxygen-rich envelopes, and suggests such objects may be fruitful sources for other new oxide identifications.