ZrO2-coated NiAl powders have been elaborated using an innovative mill process, the so-called mechanofusion process. Following processing conditions, different types of particles (size, morphology, degree of coating) can be obtained. These powders were consolidated to full density by HIPping and mechanical tests were carried out on the various elaborated products at temperatures ranging between 20-800degreesC. Results are compared to those previously obtained for ZrO2/NiAl composites elaborated by conventional methods. It is shown that mechanical strength of ZrO2/NiAl composites can be considerably improved by using the mechanofusion process. (C) 2003 Kluwer Academic Publishers.