Ni coated $Al_2O_3$ composite was successfully Prepared by the electroless deposition Process. The average size of Ni particles coated on the $Al_2O_3$ matrix powder was about 20 nm. It was hard to find any reaction compound as an impurity at interface between $Al_2O_3$ and Ni particles after sintering. The characterization of microstructure crystal structure and fracture behavior of the sintered body were investigated using XRD, TEM and Victors hardness tester, and compared with those of the sintered $Al_2O_3$ monolithic body. Many dislocations were observed in the Ni phase due to the difference of thermal expansion coefficient between $Al_2O_3$ and Ni phase, and no observed microcracks at their $Al_2O_3$ and Ni interface. In the $Al_2O_3$/Ni composite, the main fracture mode showed a mixed fracture with intergranular and transgranuluar type having some ,surface roughness. The fracture toughness was slightly increased due to the plastic deformation mechanism of Ni phase in the $Al_2O_3$/Ni composite.