ZrO₂-dispersed MgO-Al₂O₃ ceramics with various MgO to Al₂O₃ compositional ratios were prepared from Mg(OH)₂ powder, α-Al₂O₃ powder and Zr-n-butoxide by calcining at 1000°C for 2h and sintering at 1600°C for 1h. The influence of the MgO-Al₂O₃ compositional ratio on the sinterability and mechanical properties was studied. Addition of 10vol% ZrO₂ improved the relative density of the sintered specimens containing 50 and 62.5mol% Al₂O₃. However, the addition was not effective at other compositional ratios. The bending strength was improved at composition containing more than 50mol% Al₂O₃, where the dispersed ZrO₂ particles were in the form of tetragonal phase. The bending strength increased with increase in Al₂O₃ content in the ZrO₂ dispersed specimens. The fracture toughness was improved for all specimens by ZrO₂ dispersion, especially, for the specimen in which MgO-Al₂O₃ component was in a single crystalline phase.