Microwave sintering of zirconia toughened mullite (ZTM) has been performed in a single mode applicator. In comparison with conventional sintering, microwave processing of ZTM leads to a higher density and finer grain size. Microstructure of microwave sintered ZTM was characterized by TEM and HRTEM techniques. The pinning of intergranular ZrO2 dispersoids retarded the grain growth of mullite matrix. The observation of a considerable number of trans-granular microcracks indicates that microcracking toughening is the main toughening mechanism for ZTM.