The effect of tetragonal $ZrO_2$ phase on the mechanical behavior in 7 mole% calcia partially stabilized zirconia has been studied. The $ZrO_2$ powder containg 7 mole% CaO prepared by Hot Petroleum Drying Method calcined at 80$0^{circ}C$ for 1 hour was nearly 100% tetragonal but as the calcining temperature increased certain amount of monoclinic phase appeared. The sintered specimen at 1$700^{circ}C$ for 5 hours was aged at 130$0^{circ}C$ for 0, 24, 48, 72 hours. X-ray diffraction data showed that in the aged specimen monoclinic tetragonal and cubic phase coexisted. The Kc value of aged specimen for 48 hr was about 4.5MN/m3/2 much greater than unaged sample. But aged for 72 hr the KiC value was decreased. The increasing of toughness in PSZ is based on the Stress-Induced Phase Transformation that is metastable tetra-gonal $ZrO_2$ changes t stable monoclinic phase within the stress field of crack and the mechanical fracture energy absorption is occured But in this case due to certain amount of tetragonal phase transformed to monoclinic phase during cooling the microcrack effect by transformation also considered. Trerefore both Stress-Induced Phase Transformation and inclusion induced microcracking effect contrbute to the increase of fracture toughness of 7 mole% CaO-$ZrO_2$ containing monoclinic and tetragnola phase simulataneously.