The strength and thermal shock resistance of $Al_2O_3-ZrO_2$ composites have been studied. The tetragonal $ZrO_2$ powder containing 1 mol.% $Y_2O_3$ and monoclinic $ZrO_2$ powder were prepared by coprecipitation method and subsequently mixed with $Al_2O_3$ powder and granulated by sieving. Duplex composites were prepared by dry mixing matrix agglomerate with 15 to 30 vol.% of dispersion agglomerate, followed by pressing and sintering at 1$600^{circ}C$ for1 hr. These $Al_2O_3-ZrO_2$ 2 composites having heterogeneous structure showed improved thermal shock behaviors because of the microcracking and pores in dispersed granules, and compressive stresses around dispersed granules resulting from $ZrO_2$ transformation.