The properties of the powders of the system Al2O3-ZrO2-Y2O3 prepared by precipitation method were investigated. Al2(SO4)3$.$18H2O3, ZrOCl2$.$8H2O and YCl3$.$6H2O were used as starting materials. Amorphous aluminum hydrate prepared by precipitation method was completely transformed to alpha Al2O3 as a result of calcining at 1100$^{circ}C$ for 1 hr and gamma, delta and theta phases appeared as transition phases. In ZrO2-Y2O3 system prepared by co-precipitation method, the crystallization temperature of ZrO2 was increase with Y2O3 contents. The coupled crystallization occured in coprecipitated Al2O3-ZrO2-Y2O3 system, therefore the formation temperature of alpha Al2O3 and ZrO2-Y2O3 system. In this ternary system, the powder morphology showed a particular shape which was composed of large Al2O3 grains having small spherical ZrO2 particles within large Al2O3 grain and relatively large ZrO2 particles along the grian boundaries.