Alumina-zirconia ceramic material has been plasma sprayed using a water stabilized plasma torch (WSP) to produce free standing coatings. The as-sprayed coatings have very low porosity and are mostly amorphous. The amorphous material crystallizes at temperatures above 900 °C. A spark plasma sintering apparatus has been used to heat the as-sprayed samples to temperatures above 900 °C to induce crystallization while at the same time a uniaxial pressure of 80 GPa has been applied to the their surface. After such post-treatment, the ceramic samples are crystalline and exhibit very low open porosity. The as-sprayed amorphous materials also exhibit high hardness and high abrasion resistance. Both properties are significantly improved in the heat-treated samples whose microstructure is best described as nanocomposite with the very small crystallites embedded in an amorphous matrix.