The interest for functionally graded materials (FGM) has grown up during the last 2 decades owing to the possibility of developing pieces and devices with gradual variation of properties along one or more dimensions. This allows for an optimum performance as a function of the intended use. On the other hand, two stage sintering is a relative new sintering technique, where the shaped pieces are heated up to a relative density of 75–92 % of theoretical density, followed by a fast cooling step to an inferior temperature, where the piece in maintained up to the end of the densification process. This results in the development of finer microstructures, responsible for better mechanical properties. In this work, we characterized alumina-ytria-stabilized zirconia composites, with different amounts of 3Y-ZrO2 by dilatometry. After fitting thermal behavior of the different composites during sintering and determining temperature of maximum densification rate, co-pressed FGMs were produced. Then the samples were sintered by pressureless traditional technique and two stage sintering, with a peak temperature of 1450 °C and holding temperature of 1350 °C. Microstructure was studied by SEM and mechanical properties (microhardness and indentation toughness) were determined in order to compare pressureless sintered FGMs at 1500 °C and two-stage sintered FGMs.