The role of TiC and the effect of Y2O3 addition on the densification, microstructure and mechanical properties of Al2O3-TiC composite have been studied. The amount of Y2O3 has been varied from 0 to 2 wt.% while keeping the TiC content at 10, 20 or 30 wt.%. The powder compacts have been sintered at 1,75$0^{circ}C$ for various times in 1 atm Ar atmosphere and hot isostatically pressed (HIPed) at 1,$600^{circ}C$ for 0.5h under 1,500atm Ar. Considerable increase in sintered density(over 95%) has been achieved by adding 0.5 wt.% Y2O3 in specimens containing high TiC volume. More addition of Y2O3 does not affect the densification. With increasing the sintering time from 0.5 to 4h, slight increase in density results. The growth of Al2O3 grain has been enhanced by Y2O3 addition ; this tendency is reduced with increasing TiC content because of grain boundary dragging effect of TiC particles. The hardness of specimens increases considerably by an addition of 0.5wt.% Y2O3 owing to the density increase. Further addition of Y2O3 has no effect on hardness. Fracture toughness augments with TiC content by crack deflection around the particles. By adding 0.5wt.% Y2O3, all the specimens can be densified to isolated pore stage and thus can be HIPed to full densification and better mechanical property. In particular, the fracture toughness of Al2O3-30 TiC specimen increases about 50% by HIPing. Fully dense Al2O3-30 TiC with good mechanical properties can be prepared by normal Sintering/HIPing process.