In a recent work,(1) we have reported the optimization of the spark plasma sintering (SPS) parameters to obtain dense nanostructured 3Y-TZP ceramics. Following this, the present work attempts to answer some specific issues: (a) whether ZrO2-based composites with ZrB2 reinforcements can be densified under the optimal SPS conditions for TZP matrix densification (b) whether improved hardness can be obtained in the composites, when 30 vol% ZrB2 is incorporated and (c) whether the toughness can be tailored by varying the ZrO2-matrix stabilization as well as retaining finer ZrO2 grains. In the present contribution, the SPS experiments are carried out at 1200 degrees C for 5 min under vacuum at a heating rate of 600 K/min. The SPS processing route enables retaining of the finer t-ZrO2 grains (100-300 nm) and the ZrO2-ZrB2 composite developed exhibits optimum hardness up to 14 GPa. Careful analysis of the indentation data provides a range of toughness values in the composites (up to 11 MPa.m(1/2)), based on Y2O3 stabilization in the ZrO2 matrix. The influence of varying yttria content, t-ZrO2 transformability, and microstructure on the properties obtained is discussed. In addition to active contribution from the transformation-toughening mechanism, crack deflection by hard second phase brings about appreciable increment in the toughness of the nanocomposites.