Previous studies demonstrated that the strength of zirconia (ZrO2) could be enhanced or reduced by respectively adding micrometer-sized alumina (Al2O3) or nickel (Ni) particles. In the present study, 5 vol% micrometer-sized Al2O3 particles and 1 vol% nanometer-sized Ni particles are incorporated into the ZrO2 matrix, which is subsequently densified by pressureless sintering. The biaxial strength of the ZrO2/(Ni+Al2O3) nanocomposite is nearly double that of the monolithic ZrO2. The increase in strength correlated with a reduction in the critical flaw size and not with any change in toughness, which may be a result of grain boundary strengthening.