For the production of nanostructured ceramics of yttria-zirconia four powders differing in agglomerate strength, agglomerate size and crystallite size are compared. An ultra-fine-grained ceramic with a final density of 98% and a grain size of 0.18 μm could be produced from a hydrothermally crystallized ethanol-washed powder. The remaining porosity is caused by some residual defects which are present due to the irregular shape of the agglomerates and which cause improper die filling. A commercially available powder was also investigated. This powder consists of homogeneous porous, spherical, weak agglomerates. The resulting ceramic has a high density (≥ 99%) but cannot be obtained with ultra-fine grain size (minimum grain size is 0.3 μm). The air-crystallized ethanol-washed powder resulted, after sintering, in larger porosities. In this case the powder consists of weak and some strong agglomerates and a few defect clusters are found in the sintered ceramic which limit the maximum attainable density to 92%. The air-crystallized water-washed powder consists of agglomerates which are too strong to be fractured during compaction. The sintered ceramics contain a large amount of porosity (20%) which is attributed to the presence of inter-agglomerate pores.