Microstructure control of ceramics is expected to produce novel functions or to improve properties. Nanocomposite powders of functional ceramics were fabricated by vapor, solid and liquid phase reactions, respectively. Superconducting bulk materials were fabricated by thermal plasma method and mist pyrolysis method. Microstructure control of powders for sintering contributed to improve the microstructure at grain boundaries and to introduce magnetic flux pinning centers, both resulted in the improvement of superconducting transport current property. On the other hand, a magnetic nanocomposite for the remote sensing of stress in structural ceramics was fabricated by sol-gel method and solid state reaction. Successfully introduced nano-dispersoids of ferromagnetic materials by the sintering of nanocomposite powders resulted in the harmonization of added functionality and proper mechanical properties. Magnetic response to applied stress in structural ceramic matrix was detected as the result of amplified magnetostriction caused by the nano-size effect on ferromagnetic dispersoids.