Alanson is in Littlefield Township on U.S. Highway 31 at the junction with M-68. Petoskey is about 12 miles southwest on US 31 and Mackinaw City and the Mackinac Bridge are about 25 miles north. Interstate 75 is about 11 miles to the east on M-68 at Indian River. The Alanson post office opened with the name Hinman on January 17, 1877 and changed to Alanson on June 22, 1882.
As of the census of 2000, there were 785 people, 323 households, and 207 families residing in the village. The population density was 807.8 per square mile (312.5/km²). There were 407 housing units at an average density of 418.8/sq mi (162.0/km²). The racial makeup of the village was 89.55% White, 0.89% African American, 5.61% Native American, 0.13% Asian, 0.51% from other races, and 3.31% from two or more races. Hispanic or Latino of any race were 1.02% of the population.
There were 323 households out of which 31.6% had children under the age of 18 living with them, 48.3% were married couples living together, 11.8% had a female householder with no husband present, and 35.9% were non-families. 29.4% of all households were made up of individuals and 10.2% had someone living alone who was 65 years of age or older. The average household size was 2.43 and the average family size was 2.93.
In the village the population was spread out with 26.9% under the age of 18, 10.2% from 18 to 24, 33.1% from 25 to 44, 19.0% from 45 to 64, and 10.8% who were 65 years of age or older. The median age was 33 years. For every 100 females there were 95.8 males. For every 100 females age 18 and over, there were 93.3 males.
The median income for a household in the village was $33,125, and the median income for a family was $38,333. Males had a median income of $23,929 versus $20,568 for females. The per capita income for the village was $20,703. About 4.0% of families and 8.1% of the population were below the poverty line, including 5.7% of those under age 18 and 15.0% of those age 65 or over.