Composite powders of Al2O3 and 0 to 30 vol% Ce2Zr2O7 are prepared by a hybrid sol-gel method using Al2O3 powders and a sol formed from Zr-alkoxide and cerium nitrate. All the Zr from the sol goes to form the cerium zirconate phase when the powders are calcined in N-2. Pressureless sintering in air at 1500 degrees C yields composites with high density (similar to 98%). Maximum values of fracture toughness and strength, 6.5 MPa root m and 620 MPa respectively, (e.g. 3.5 MPa root m and 350 MPa for pure Al2O3) are obtained in 10 vol% Ce2Zr2O7 composite sintered in air. The dominant mechanism for enhancement in K-IC is believed to be crack bridging. Crack bridging activity in the 10 vol% composite is found to be maximum and extends upto similar to 190 mu m from the crack tip.