The cermet based on metallic iron with zirconia toughened alumina (ZTA) as the reinforcing phase was prepared by vacuum hot-pressed sintering. The ZTA particles were subjected to electroless nickel plating to improve the interfacial bonding ability of ZTA and Fe matrix. In this paper, after electroless nickel plating, the effects of different particle sizes and different contents of ZTA particles on the grinding properties of Fe-based ZTA (Fe-ZTA) cermets were investigated. The results show that the ZTA particles are tightly bound to the Fe matrix. An interface layer is formed between the ZTA particles and the Fe matrix and it can improve the grinding ability of the Fe-ZTA cermet. By reducing the particle size and the content of ZTA particles, the friction coefficient between Fe-based ZTA cermet and the machined surface can be increased, and the surface roughness of the machined surface will reduce. When the ZTA particle size is F14 and the iron binder content is 40%, the friction coefficient between the Fe-ZTA cermet and the steel bar is 0.4981, the surface roughness of steel bar is 40.164 μm, the grinding ratio is 685.952.