To improve low mechanical properties of cubic zirconia, Al2O3 has been dispersed to Yb2O3 stabilized ZrO2 (YbSZ). YbSZ/Al2O3 nanocomposite powders were prepared by solution chemistry route, and sintered bodies were fabricated by pressureless sintering. Obtained composites have finer matrix grains with increasing Al2O3 addition. The fracture strength of composites was remarkably increased due to the refinement of YbSZ matrix grain size. Ionic conductivity of composite at high temperatures was almost the same value of the monolithic YbSZ ceramic.