Piezoelectric Pb(ZrxTi1-x)O-3 (PZT) ceramics with small amount (0.5-2.0 wt.%) of In2O3 are prepared by conventional sintering method. Based on X-ray diffraction analysis, the tetragonality of PZT matrix decreases with In2O3 content, indicating that In2O3 diffuses into PZT matrix. The microstructure of PZT matrix is significantly refined by doping small amounts of In2O3. The grain size reduction and the matrix grain boundary reinforcement are the probable mechanism responsible for the high strength and hardness in the PZT/In2O3 materials. The enhancement in Young's modulus is attributed to In3+ substitution. The decreased tetragonality with In2O3 addition results in less crack energy absorption by domain switching and, hence, causes the small reduction in fracture toughness. (C) 2003 Elsevier Science Ltd. All rights reserved.