Abstract In the present study, yttria stabilized zirconia (YSZ) nanoparticles, prepared by means of an aqueous solution–gel method or a hydrothermal route, are incorporated in a matrix of submicron alumina particles by wet mechanical milling. The microstructural characteristics and the mechanical and tribological properties of the obtained alumina–YSZ nanocomposites are evaluated as a function of different processing conditions like milling time, YSZ amount, sintering procedure and synthesis method of YSZ. It is noticed that the synthesis procedure and the agglomeration degree of the YSZ nanoparticles seriously affect the densification process of the alumina–YSZ nanocomposites and also their mechanical and tribological properties. The most probable cause for the difference is that the hydrothermally prepared YSZ nanoparticles are not as homogeneously distributed in the alumina matrix as the solution–gel prepared nanoparticles. Moreover the former nanoparticles have surface groups which release undesired gases during sintering. Thus to obtain a dense sample, nanocomposites with these nanoparticles require a higher sintering temperature and this has a negative effect on the mechanical and tribological properties of these materials.