An alumina-based nanocomposite is fabricated through the addition of secondary nanophase material to an alumina matrix to alter and tailor the properties of alumina. The addition to alumina of semi-conductive materials, such as silicon carbide (SiC), and high conductive materials, such as carbon nanotubes with a characteristic size in the nanometer range, can alter the mechanical strength, hardness, toughness, and electrical and thermal properties of alumina. This paper discusses recent advances in the synthesis of alumina–SiC and alumina-carbon nanotube (CNT) nanopowders and their consolidation using conventional and non-conventional techniques. Mechanical (hardness, fracture toughness and flexural strength) and functional (thermal and electrical) properties are discussed. The influence of the microstructure on the properties of alumina–SiC and alumina–CNT nanocomposites is discussed. Furthermore, potential applications and current related research trends are described.