YBa2Cu3O7−x (1-2-3) powders and 1-2-3 powders doped with 14 wt. % Ag (AgYBa2Cu3O7−x) were produced using aerosol decomposition of nitrate solutions. Powder produced at T > 900 °C consisted of submicron particles and had Tc ≍ 92 K in magnetic susceptibility measurements. As-produced Ag-doped powder was a composite of nearly phase-pure 1-2-3 and crystalline Ag (by x-ray diffraction) for reactor temperatures between 900 °C and 950 °C, whereas powder produced at T≥ 970 °C contained significant amounts of Y2BaCuO5 which were not found in 1-2-3 synthesis in the absence of Ag. This implied that the melting of Ag (∼960 °C) or the Ag-O eutectic (∼940 °C) promoted decomposition of 1-2-3 during powder synthesis. Dilatometry showed that 1-2-3 and Ag/1-2-3 powders densified rapidly between 800 °C and 875 °C, achieving nearly 90% of theoretical density after heating to 875 °C at 5 °C/min in air. Pellets of the Ag-doped powder were also sintered for 2-60 h at 895 °C in air. Scanning electron and optical microscopy revealed that Ag grains remained fine and uniformly distributed, varying in size from ∼1 μm after 2 h to 3–7 μm after 60 h, while 1-2-3 grains became plate-shaped with thicknesses of 1–5 μm and lengths of 10–30 μm after 60 h. Thus, the use of aerosol Ag /1-2-3 powders allows the use of lower processing temperatures and shorter times to produce dense ceramics with smaller Ag and 1-2-3 grain sizes than can be obtained using solid-state reaction routes.