Alumina (Al2O3)-zirconia (ZrO2)-hydroxyapatite (HA) composite is used as biomaterials. Biomaterials must be bio-compatible to the body and should have excellent mechanical and tribological properties. 1 wt.% of rare earth oxide (Dy2O3) was added to the basic composition of composite Al2O3 -ZrO2 (15wt.%)-HA(1wt.%). The powder mixture was hot-pressed at 1300°C in Ar gas environment under 30 MPa pressure for densification sintering. The microstructural analysis, phase transformation, surface morphology and mechanical properties like hardness, fracture toughness, mechanical strength of the composite were observed and evaluated by SEM , XRD, Vickers hardness, etc. The results demonstrated that the addition of 1 wt.% dysprosia has increased the mechanical properties of composite.