Densification characteristics and fracture toughness of the alumina-mullite-zirconia (AMZ) composites fabricated by the colloidal mixing route were examined. The densification of boehmite-silica-zirconia precursor compacts was characterized by three distinct stages. Stage I was represented by a rapid shrinkage between 1100 and 1300 degrees C and was caused by the viscous flow sintering of the SiO2 component. Stage II was characterized by a temporary cessation of the shrinkage caused by the mullitization. Stage III was represented by a restoration of the shrinkage for temperatures above 1450 degrees C. The alpha-Al2O3 seeding facilitated the formation of elongated grains in the AMZ composites, and these elongated grains correspond to alpha-Al2O3. The toughening caused by the microcrack nucleation was comparable to that by the t --> m martensitic transformation and increased with increasing total content of zirconia.