As for zirconia toughened alumina (ZTA) with various ratios of alumina/zirconia, crystal and micro structures, fracture toughness and phase stability were evaluated by X-ray diffraction, Raman spectroscopy, and aging test in hydrothermal environment. The grain size and monoclinic fraction of zirconia phase and residual stress in alumina matrix changed as a function of zirconia content. The ZTA showed higher fracture toughness than conventional alumina. The fracture toughness of ZTA was highest at which the content of tetragonal zirconia was maximum. The monoclinic fraction of ZTA did not increase even after aging test at 121°C for 150 hr. This study indicates that the optimization of tetragonal zirconia content is essential for achieving higher fracture toughness of ZTA. The ZTA with phase stability as well as with fracture toughness is expected as bearing materials which could extend lifetime of artificial joints in clinical use.