Intra-type nanocomposites, in which nanosized second-phase particles are embedded within matrix grains, generate dislocations around the dispersed nanoparticles. The intra-type nanostructure induces a thermal expansion mismatch between the matrix and the dispersed particles, which will yield nanoscale stress distribution around the particles and generate lattice defects, such as dislocations. The dislocations of ceramics can be generated at elevated temperatures, become sessile dislocations at room temperature, and serve as nanocrack nuclei in highly stresses fields, e.g. at a main crack tip. The frontal process zone size ahead of a crack tip is expanded due to creation of nanocracks and hence the fracture toughness is improved. Annealing after sintered nanocomposites is important in controlling the dislocation activities. Appropriate annealing will disperse dislocations into the matrix grains. However, dislocations are sensitive to temperature, and higher temperature or longer annealing time result in dislocation disappearance and cause the reduction of the strength and fracture toughness of nanocomposites. In this study, commercially available γ-alumina agglomerated powder with high porosity was used to create the intra-type nanostructure. Nickel nitrate solution was infiltrated into nanopores of the γ-alumina agglomerates in vacuum. The alumina/nickel composite powder following reduction in hydrogen atmosphere was sintered using a pulse electric current sintering method. The volume fraction of nickel was about 3 vol %. After appropriate annealing, the highest fracture toughness was obtained to be 7.6 MPam1/2, which is two times higher than that of monolithic alumina.