$Al_2O_3$-20w/o $ZrO_2$ composite powders were prepared by the emulsion-coprecipitation method and the effects of preparative conditions on powder characteristics were investigated. In the preparation of $Al_2O_3$-$ZrO_2$ composite powders, toluene was used instead of kerosene as the oil phase in emulsions. After coprecipitation, the emulsion was easily broken into a single liquid phase by adding methanol, and then precipitates could be effectively collected by filteration. The fact that all $ZrO_2$ phases present at room temperature in composite powders calcined at $1100^{circ}C$ after washed by methanol had a tetragonal structure confirmed that methanol-washing enhanced the dispersibility of fine $ZrO_2$ particles in $Al_2O_3$ matrix. $Al_2O_3$-$ZrO_2$ composite powders were spherical particles of 0.2${mu}{ extrm}{m}$ diameter. Pellets sintered at $1650^{circ}C$ for 2hrs showed the relative theoretical density of 97.3% and the fracture toughness of 5.01MN/$m^{3/2}$.