Al2O3 and Al2O3/ZrO2 composites have been fabricated by slip casting from aqueous suspensions. The physical and structural characteristics of the starting powders, composition of the suspensions, casting behaviour, microstructure of the green and fired bodies and the mechanical properties of the products were investigated. The addition of ZrO2 to Al2O3 leads to a significant increase in fracture toughness when ZrO2 particles are retained in the tetragonal form (transformation-toughening mechanism) but when microcracking (due to the spontaneous transformation of ZrO2 from the tetragonal phase to the monoclinic one) is dominant, an excellent toughness value is accompanied by a drastic drop in strength and hardness.