Abstract: (0 0 1)-oriented 3 mol% yttria stabilized tetragonal zirconia (3Y-TZP) has been developed by reactive synthesis of undoped pure monoclinic zirconia and co-precipitated 8 mol% yttria-stabilized zirconia (8Y-ZrO2). The dispersed pure monoclinic ZrO2 powder, having magnetic anisotropy, was first aligned in a strong magnetic field and co-sintered in a randomly distributed cubic 8Y-ZrO2 fine matrix powder. The reactive sintering resulted in a 3Y-TZP ceramic with a (0 0 1) orientation. The (0 0 1)-oriented 3Y-TZP showed a substantial toughness anisotropy, i.e. the toughness along the [0 0 1] direction is 54% higher than that of its perpendicular direction. Moreover, the toughness along the [0 0 1] direction is 49% higher than that of a non-textured isotropic reactively synthesized 3Y-TZP and 110% higher than that of an isotropic co-precipitated powder based 3Y-TZP. The substantially enhanced toughness was interpreted in terms of the tetragonal to monoclinic martensitic phase transformability.