Partially stabilized zirconia (PSZ) has become a widely used ceramic because of its enhanced fracture toughness and nonlinear stress-strain behavior, which favors the material compared to classical structural ceramics. One application of PSZ is the fabrication of particle reinforced metal-matrix composites of PSZ particles in a TRIP-steel matrix. [1] The main advantage of such composites is their capability to compensate local stress concentrations by phase transformation in both components.The high fracture toughness of PSZ results from a solid state phase transformation in the crack tip stress field. This effect, known as transformation toughening, was first reported by Garvie et al. [2] The effect was extensively investigated. [3][4][5][6] Generally, some conditions have to be complied for transformation toughening. The existence of a metastable phase in the material is required. The martensitic transformation from the metastable parent phase to the stable resultant phase has to be capable of being stress induced. It must happen instantly, which excludes any time-dependent processes, and is accompanied by a volume and/or shape change. In the PSZ ceramic material under consideration, a metastable tetragonal phase exists as finely dispersed precipitates embedded coherently in a cubic matrix material. These precipitates can transform into the monoclinic phase [7] triggered either by temperature or stress. The phase transformation, if unconstrained, results in a volume dilatation of approximately 4% and a shear strain of about 16%.Results of dilatometric experiments [8] show clearly the strong nonlinearity in the strain-temperature behavior of the investigated PSZ ceramic. In order to be able to simulate the processing of the composite material as well as to perform strength analysis, it is neccessary to provide proper constitutive equations for stress and temperature controlled phase transformation of PSZ ceramics based on physical assumptions accounting for the responsible micromechanical effects.The purpose of the current contribution is to present a material model for both mechanical and thermal loading. This is done by adopting and extending the model presented in the work of Sun et al. [9] Based on the concept of representative volume element (RVE) and the Hill-Rice internal variable theory, [10] this model provides a set of constitutive equations for the transformation plasticity of PSZ ceramics. The transformation criterion used in the model shows pressure dependence. In accordance with experimental results showing the influence of the macroscopic external applied stress on the formation of inelastic transformation strains, the material model takes into account the accompanying deviatoric and dilatational transformation strain and relates the strain deviator to the externally applied deviatoric stress. However, the model barely considers the crystallographic properties of the tetragonal to monoclinic phase transformation. It rather uses micromechanically motivated modeling approaches to predict the microst...