The elastic properties of Al2O3-ZrO2 composite were determined from ultrasonic velocity measurements, and were found to be dependent upon the amount of ZrO2 phase, the compacting pressure of the green ceramic and sintering time. The velocity in the Al2O3-ZrO2 composite increased to a maximum for about 3 wt% unstabilized ZrO2 dispersed in Al2O3. The velocity decreased monotonically thereafter. The increase in moduli, as shown by an increase in velocity, has been attributed to phase transformation of the unstabilized ZrO2 from tetragonal to a monoclinic phase, which presumably leads to a toughening and strengthening effect, and also due to the action of ZrO2 in stopping grain growth of Al2O3 during densification. The excessive shear strain, induced by the tetragonal] monoclinic transformation phase, with greater than 50 wt % ZrO2 content, caused microcracks to appear in the composite. This reduced the elastic moduli of the composite. It was found that the composition dependence of the elastic moduli lie outside the theoretical bound of Voigt and Reuss for the elastic moduli of two-phase materials, and that by increasing the compacting pressure, an improvement in the elastic moduli of the sintered composite occurred irrespective of ZrO2 content. The thermal expansion of the composites showed no appreciable change with addition of zirconia up to 5 wt % ZrO2. However, dimensional changes due to phase transformation particularly with high zirconia content have been established.