ZrO2–Al2O3 powders were synthesized by spray pyrolysis. These powders were sintered at 1 GPa in the temperature range of 700–1100 °C. The microstructural evolution and densification are reported in this paper. The application of 1 Gpa pressure lowers the crystallization temperature from ∼850 to <700 °C. Similarly, the transformation temperature under 1 GPa pressure for γ → α–Al2O3 reduces from ∼1100 to 700–800 °C range, and that for t → m ZrO2 reduces from ∼1050 to 700–800 °C range. It was possible to obtain highly dense nanocrystalline ZrO2–Al2O3 composite at temperatures as low as 700 °C. The effect of high pressure on nucleation and transformation of phases is discussed.