Al2O3-ZrO2 composites were sintered using low cost extended arc thermal plasma reactor and conventional heating. Composites prepared in a wide range of composition were studied in terms of their density, shrinkage, hardness, structure, microstructure and dielectric response. Experimental parameter such as sintering time, sintering temperature and plasma power were optimized to achieve higher sintered end product. Highly dense sintered products were obtained by plasma heating route within short sintering time compared with conventional sintered method. Interesting development pertaining to structure and phase evolution, structure and dielectric response are analyzed. It is found that compositional variation in this composite produces structural phase separation at different sintering conditions, which is more in plasma heating product than conventional heated product. Plasma sintered product always shows less dielectric constant as compared to conventional sintered sample.