Y2O3-MgO composite nanopowder with a volume ratio of 50: 50 was synthesized using a sol-gel combustion process. X-ray diffraction analysis of the as-synthesized nanopowder shows phase pure Y2O3 and MgO with a cubic crystal structure and crystalline size similar to 15 nm. The fully dense Y2O3-MgO nanocomposites were prepared by pressureless sintering the composite nanopowder at 1400 degrees C for 2 h, followed by hot isostatic pressing at 1350 degrees C for 1 h and postsinter annealing at 1000 degrees C for 10 h. The Y2O3-MgO nanocomposite exhibit excellent infrared transmittance (62%-80%) over 3-7 mu m infrared wavelength ranges with an average hardness of 10.6 GPa.