Transparent ceramics are materials of choice for high temperature IR window applications: they are a compromise between transparency, thermal shock resistance and processing costs. Alumina, AlON and spinel-type ceramics have been developed for the 3-5 μm atmospheric transparency band. Nevertheless, these compounds show a degradation of their optical properties (transparency and emissivity) at high temperature (above 500°C), limiting their use in that wavelength range. MgO and Y2O3 have a broader transparency window up to 9 μm and they are transparent enough in the 3-5 μm range even at high temperature but their thermomechanical resistance is weak. Authors have combined these compounds into a nanocomposite ceramic to improve this while keeping good IR transparency. To reach such properties, porosity ratio must be close to zero and the average grain size must stay as small as possible (< 200 nm). Throughout this study, Pechini’s esterification sol-gel route was chosen in order to process the Y2O3-MgO nanocomposite powder. Then, a two-step sintering and low temperature profiles (700‡C) were performed by the Spark Plasma Sintering technique. Post treatments, air annealing and Hot Isostatic Pressing at 400MPa, improved the quality of the ceramics. Finally, structural, microstructural and optical characterizations were carried out. Samples with different nanostructures were obtained. The best samples have average grain diameters below 200 nm with almost no porosity. Good mid-IR transparency, up to 80% for a thickness of 1 mm, was obtained in band II. The material showed a loss of transparency at 5μm below 15% at 1000°C.