Sintered zirconia-alumina composites, prepared in a wide range of compositions, are studied in terms of their electrical response. Both grain conductivity and dielectric constant show the typical characteristics expected from the percolation theory, with v(c) = 0.14 +/- 0.2 as the critical zirconia volume fraction for the onset of conduction. When the conducting zirconia phase is calcined prior to forming the composite, the whole system still shows a strongly reduced conduction response even for zirconia volume fractions (v) in the range of 0.4-0.5, after which it is considerably enhanced for v=0.7. These results are discussed in terns of (i) the influence of the material's microstructure and (ii) the effect of stress resulting from the alumina sintering on the calcined zirconia grains on the overall electrical response of the composite. (C) 2003 Elsevier Science B.V. All rights reserved.