The present research has been focused on the development of alumina-nano zirconia composite refractory, which particularly has high mechanical properties. In this study, alumina reinforced with 0.5% and 1 wt% zirconia nanoparticles is prepared by powder metallurgy route and sintered at different sintering temperatures i.e. 1400°C, 1550°C and 1700°C. Sintered samples have been characterized for apparent porosity, bulk density, compressive strength and flexural strength. The apparent porosity is decreased with increasing the zirconia content in the samples. These variations in apparent porosity are in consistent with the particle size. The bulk density follows a reverse trend as that of apparent porosity. The mechanical properties of the sintered specimens were influenced both by the sintering temperatures and the content of nanoparticles present in the sintered product. It has been observed that the sample sintered at 1550°C and having 0.5 wt% nano-zirconia is shown better mechanical properties, in comparison to 0% and 1 wt% Nano zirconia content at 1400°C and 1700°C each.