Abstract: A composite ceramic material having improved properties is disclosed as well as several methods for preparing the same. The composite powder is substantially comprised of zirconia and spinel phases, produced by precipitation and calcination of the precipitate of the oxide forming precursor salts. A preferred method for introducing the zirconium is as a soluble and/or decomposable salt during precipitation of the spinel forming hydroxyl or halo hydroxyl spinel forming salts. The zirconium salt decomposes to zirconia during calcining and/or sintering of the powder resulting from the precipitation. A preferred composite is that obtained from magnesium and aluminum salts, resulting in a MgAl.sub.2 O.sub.4 spinel and intimately admixed ZrO.sub.2 which contains a stabilizing agent.