The present work is aimed to develop metal toughened alumina composite which will be used as a cutting tool material, primarily by addition of silver, then microstructural characterization and property measurement of the developed composite. In the work a chemical synthesis using the sol-gel method was carried-out to prepare alumina powder from aluminium nitrate Al (NO3)3,9H2O. Then AgNO3 was well mixed with the prepared ¿-Al2O3 powder in aqueous solution followed by evaporation and heating, to get 5 and 12 volume percent of Ag in the Al2O3-Ag mixture. A conventional powder metallurgical route was followed to prepare Al2O3-Ag composite pellets. First PVA was added as binder with the mixture, and then the powder was compacted in a circular shaped hole die-punch assembly at certain uni-axial pressure for the samples in a hand press to prepare disc pellets of size 16 mm diameter and thickness of ~6mm and ~3mm . The pellets were first dried at 500°C for 2 hours to burn off the PVA, then pre- sintered at 950°C for 2 hours and finally sintered at 1600°C for 2 hours as soaking time in a furnace.