Zirconia containing ceramics have exceptionally high fracture toughness compared with other structural ceramics. Application areas vary widely from traditional uses like refractory and glass to the more advanced fields like ballbearing, automobile appliances, turbine blades, grinding media, cutting tools, space shuttles to bio-implantations. It has the potential to toughen and / or strengthen ceramic matrix utilizing the stress-induced tetragonal to monoclinic phase transformation of ZrO2 .In the present work monoclinic zirconia (0.5-10wt %) doped preformed MgAl2O4 Spinel powder was synthesized and characterized. The mean particle size of the spinel powder was 8.54 µm and that of zirconia was 5.67 µm. The bulk density increased gradually from 2.34 gm/cm 3 of Spinel to 2.52, 2.66, 2.86 gm/cm 3 with 10% zirconia added sample at 1350 o C/1h ,1500 o C and 1650 o C for 1 hour respectively. The apparent porosity of spinel also decreased from 33.29% to 32.00, 29.78 & 23.28% at 1350, 1500 & 1650 o C/1h respectively with 10 wt.% zirconia addition. XRD of all the compositions fired at different temperature reveals that with increase in zirconia content and temperature, transformation of monoclinic to tetragonal phase increased up to 1500 o C, but slightly decreased thereafter at 1650 o C. The mechanical strength of the spinel increased gradually with increase in Zirconia content and temperature. The compressive strength increased three fold from 9.39MPa in spinel only to 24.7MPa with 10wt% zirconia at 1350 o C. With increase in temperature to 1650 o C the fracture toughness also exhibited an increase from 40.4MPa to 82.1MPa with 10wt% zirconia.