Al2O3-ZrO2 composites containing nominally equal volume fraction of Al2O3 and ZrO2 have been synthesized through combined gel-precipitation technique. Subsequently the gels were subjected to three different post gel processing treatments like ultrasonication, ultrasonication followed by water washing and ultrasonication followed by alcohol washing. It was observed that while in unwashed samples crystallization took place at low temperature, crystallization was delayed in the washed gels. The phase transition of ZrO2 in the calcined gels followed the sequence; amorphous -> cubic ZrO2 -> tetragonal ZrO2 -> monoclinic ZrO2. On the other hand, phase transition in alumina followed the sequence amorphous to gamma-Al2O3, the transition taking place at 650 degrees C. No alpha-Al2O3 could be detected even after calcination at 950 degrees C. However, all the sintered samples had alpha-Al2O3. In spite of high linear shrinkage (19-21%) during sintering, the sintered sample had density of only above 70% for all the four varieties of the powders. However, in spite of the low sintered density of the pellets, 31% tetragonal zirconia could be retained after sintering at 1400 degrees C and it reduced to about 16% at 1600 degrees C.