The 0.75 to 3 mol% Y2O3-stabilized tetragonal ZrO2 and Al2O3/Y-TZP nano-composite ceramics with 0.2 to 0.7 wt% of alumina were produced by a colloidal technique and low-temperature sintering. The influence of the resulting density, microstructure, the yttria-stabilizer and the alumina content on toughness was determined. The bulk 2.7Y-TZP ceramic with an average grain size of 110 nm reached fracture toughness of 11.2 MPa·m1/2. A nano-grained alumina/zirconia composite with an average grain size of 92 nm was obtained. Y-TZP ceramics with a reduced yttria-stabilizer content were shown to reach fracture toughness of 13.8 MPa·m1/2 (2Y-TZP), and 14.5 MPa·m1/2 (1.5Y-TZP). Y-TZP/alumina composites with 0.35 wt% of Al2O3 were shown to reach fracture toughness of 15.7 MPa·m1/2 (2Y), 15.3 MPa·m1/2 (1.5Y).