Using NH4HCO3 solution as precipitant, the ultrafine 3Y-ZrO2/Al2O3 precursors were prepared by the liquid-phase precipitation method. The well-dispersible ZrO2/Al2O3 composite nanopowders with particle size 10nm were obtained by calcining the precursor at 1000°C. The XRD patterns show no γ-Al2O3 and θ-Al2O3 formed during calcination. The powders have excellent sinterability and the relative density of specimen is up to 99% after sintering the green compacts at 1550°C. Microstructural analysis of the sintered bodies reveals the uniform distribution of the zirconia grains in the alumina matrix.