Al2O3-ZrO2(ZTA) composites were fabricated by a surface-induced coating of the precursor for the ZrO2 phase on the kinetically stable colloid particles of Al2O3. The fabricated composites were characterized by a uniform spatial distribution of the dispersed ZrO2 phase and by the absence of large ZrO2 grains throughout the Al2O3 matrix. The fracture toughness (KIC) and the bending strength of ZTA composites sintered at 1$600^{circ}C$, respectively, were 5.6 MPa.m1/2 (for 20 wt% ZrO2) and 600 MPa (for 15wt% ZrO2). The fraction of tetragonal ZrO2 phase decreases as the total content of ZrO2, suggesting that both the stress-induced tlongrightarrowm transformation and the microcrack nucleation contribute to the toughening of the ZTA composites fabricated by the surface-induced coating.