In-situ processing route was adopted to disperse carbon nanotubes (CNTs) into $Al_2O_3$ powders homogeneously. The$Al_2O_3$ composite powders with homogeneous dispersion of CNTs could be synthesized by a catalytic route for in-situ formation of CNTs on nano-sized Fe dispersed $Al_2O_3$ powders. CNTs/Fe/$Al_2O_3$ nanopowders were densified by spark plasma sintering (SPS). The hardness and bending strength as well as electrical conductivity increased with increasing sintering temperature. However, the electrical conductivity of the composites sintered at above $1500^{circ}C$ showed decreased value with increasing sintering temperature due to the oxidation of CNTs.