Nano-Fe particles coating Al2O3 composite powders were prepared by heterogeneous precipitation method with nanometer -Al2O3 and Fe(NO3)3•9H2O as raw materials. The composite powders were analyzed by DSC-TG, XRD,SEM and Zeta potential. Results showed that Fe coating Al2O3 nanometer composite powders were obtained in the condition of being sintered at 500°C for 30min and reduced at 700°C for 1h in H2. The coating Fe nanometer particles are in the shape of sphericity with diameter about 30nm and the dispersion of the powders is uniform. Al2O3/Fe composite ceramics were obtained by hot-pressing (30MPa). The mechanical properties of the composite were investigated after hot press at different temperatures. With the increasing of Fe content in composite ceramics, the hardness of the composite is decreased. Fracture toughness of 10mol%Fe content is 5.62MPa after sintered at 1400°C, which is increasing 57% high than that of monolithic Al2O3 ceramics.