Nanosized spherical ZrO2 (Y2O3)-Al2O3 particulate composites with average particle size in the range of 30-40 nm have been prepared by evaporation of coarse grained oxides in an inductively coupled plasma. The powders contain m-, t-ZrO2 and θ-, δ- Al2O3 phases. The presence of Al2O3 reduces the crystallite size of ZrO2 and increases the content of the t-ZrO2 phase and prevents phase transition of ZrO2 during additional calcinations. The surface characteristics of ZrO2-Al2O3 particles testify that zirconia particles are covered by alumina.