The low thermal conductivity of Lanthanum hexaaluminate, abbreviated as LHA, combined with high structural reliability of alumina matrix ceramics attracted our attention to develop a new functionally graded layered LHA-Al2O3-composite, with a LHA and a porosity gradient along the thickness of a bulk oxide ceramic. LHA is formed by in–situ reaction during sintering of the alumina/LHA composite. The high sintering temperature required for completion of LHA formation in LHA-rich layers causes grain growth and a degradation of mechanical strength in alumina-rich layers. Therefore, microwave hybrid heating was investigated as a method to enhance the reaction rate without excessive grain growth. Comparison of conventionally and microwave assisted sintered homogenous composite ceramics with 20–80 volume percent LHA showed that utilization of microwave heating could enhance the solid–state reaction and densification in samples containing more than 20 volume percent LHA. Enhanced microwave absorption in LHA rich layers assisted the sintering of a functionally graded composite at lower temperatures, enabling LHA formation without any abnormal grain growth in alumina rich layers.