²-Si3N4 matrix composites reinforced with nano-meter scale SiC particles were fabricated by hot-pressing the mixture of SiC and Si3N4 fine powders. Interface microstructure and crack propagation in the composite were observed by high resolution electron microscopy. The interface between SiC and Si3N4 had good coherence, but no preferred orientation was observed. At the interface between SiC and Si3N4, the (111) face of SiC particles was flat, and sometimes a disturbed lattice structure thinner than 1 nm was observed. Near the main cracks, the microcracking at fine SiC particles/Si3N4 matrix interface was frequently observed. The cracks propagated exactly along this interface. The interface microcracking seems to contribute to the improvement of fracture toughness.