Alumina (Al2O3) and zirconia (ZrO2) have good overall properties and thus are widely used oxide technical ceramics. The biggest drawback of Al2O3 is its low fracture toughness. In contrast, ZrO2 is relatively tough, but is also much more expensive. In order to improve the alumina toughness, composite ceramics are being developed. Slip casting technology has economic advantages over the conventional hot isostatic pressure technology, but problems may arise when preparing stable highly-concentrated suspensions (slip) for filling the mold. The purpose of this study is to prepare aqueous suspensions using 70 wt. % α-Al2O3, with 0, 1, 5 and 10 wt. % of added t-ZrO2. Suspensions were electrosterically stabilized using the ammonium salt of polymethylacrylic acid, an alkali-free anionic polyelectrolyte dispersant. Also, magnesium oxide in form of magnesium aluminate spinel (MgAl2O4) was used to inhibit the abnormal alumina grain growth during the sintering process. Minimum viscosities were used as stability estimators, where an increase in ZrO2 content required adding more dispersant. After sintering, the Vickers indentation test was used to determine the hardness and the indentation fracture toughness from the measurement of the crack length. Also, the brittleness index (Bi, μm−1/2) was calculated from values of Vickers hardness and the Vickers indentation fracture toughness. It was found that with increasing ZrO2 content the fracture toughness increased, while the hardness as well as the brittleness index decreased. Zirconia loading reduces the crystallite sizes of alumina, as confirmed by the X-ray diffraction analysis. SEM/EDS analysis showed that ZrO2 grains are distributed in the Al2O3 matrix, forming some agglomerates of ZrO2 and some pores, with ZrO2 having a smaller grain size than Al2O3.