ZTA powder with a composition of 85 wt% alumina/15 wt% zirconia was prepared by a gel precipitation method. Sinter forging was performed with this powder to enhance the mechanical properties of ZTA materials. The influence of processing flaws on mechanical properties of sinter forged materials and pressureless sintered materials was investigated. Sinter forging at 40 MPa effectively decreases process flaw sizes resulting in a homogeneous microstructure and improves the grain boundary structure because of large shear applied in this process. Sinter forging resulted in an increase in strength and toughness by a factor of 1.5–2 when compared with pressureless sintered compacts. The fracture energy is enhanced by a factor of two. The predominate mechanism for improvement of mechanical properties of these sinter-forged ZTA materials is grain boundary strengthening.