The influence of the addition of ferric oxide to 3Y-TZP on the conductivity and microstructure of sintered Y-stabilised tetragonal zirconia ceramics (3Y-TZP) was investigated. A comparison was made between two different dense 3Y-TZP-U-Fe203 composites. Compacts were made by pressureless sintering at 1150 degreesC or by sinterforging at 1000 degreesC and 100 Mpa. The sinterforging process resulted in smaller zirconia and hematite grains and a higher monoclinic zirconia content as compared to the compact that was sintered pressureless. The high monoclinic content led to loss of ionic conductivity. The addition of ferric oxide caused electronic conductivity. The sinterforging resulted in a high concentration of metastable defects in the zirconia-hematite composite, leading to a relatively high electronic conductivity. Heating above 380 degreesC caused irreversible loss of these defects and'a large decrease in electronic conductivity.