This paper reports on improvement of the physical and mechanical properties of Y 2 O 3 -ZrO 2 ceramics through compositional optimization, the use of nanograined powders and utilization of microwave sintering. ZrO 2 with 2-5 mol% Y 2 O 3 , prepared from nanopowders, was sintered in both conventional and microwave furnaces under exactly the same heating schedule. It was found that microwave sintering improves physical and mechanical properties of Y 2 O 3 -ZrO 2 ceramics compared with conventional sintering. Compositions containing 2 mol% Y 2 O 3 exhibit the greatest improvement due to retention of tetragonal ZrO 2 , with a 5% increase in relative density compared with conventional sintering. Grain size analysis indicated that there was significant grain growth in microwave sintered (MWS) samples (353 nm) compared with their conventionally sintered (CS) counterparts (200 nm) which is thought to be related to enhanced diffusional effects during microwave sintering. Associated with this was a 22% increase in Young's modulus to 220 GPa, a 77% increase in Vicker's Hardness up to 11.5 GPa and a 165% increase in biaxial flexural strength up to 800 MPa. Owing to the differences in physical and mechanical properties along with the altered phase assemblages produced, it is apparent that microwave heating provides an additional driving force during sintering which enhances diffusion processes.