This study aims to evaluate the recycling potential of solid waste alumina powder (WAP) by utilization of the two-step sintering (TSS) process. For the study, WAP was collected as an industrial scrap after the machining process for the formation of green alumina compacts. The alumina samples were prepared according to the slip casting method by preparing suspensions containing commercial alumina with 0.8 μm average particle size and by adding up to 20 dwb. % (i.e., expressed on a dry weight basis) of WAP with 3.4 μm average particle size. The samples were sintered at optimized TSS conditions and compared with conventional one-step sintering (OSS) by conducting morphological analyses. The average grain size (AGS) was determined from the obtained field emission scanning electron microscopy (FESEM) images, while the sample porosity was calculated based on apparent densities. The obtained micrographs after TSS implementation revealed a partially textured microstructure. Furthermore, a comparison of the mechanical properties of alumina samples lacking or containing 20 dwb. % of WAP obtained after sintering is presented. The indentation fracture toughness (~3.2 MPa m1/2) and Vickers hardness data (~14.5 GPa) showed a positive effect of adding WAP to alumina samples. The slightly improved mechanical properties of ceramic samples containing waste alumina are a consequence of lower porosity, which is due to the remaining sintering additives in WAP. The collected results demonstrate the possibility of using TSS for sintering ceramic materials that contain WAP.