Whisker reinforced ceramics offer the potential for increased fracture strength and toughness . However, residual strain due to the thermal expansion mismatch between Al2O3 and SiC may affect mechanical properties of such composites. Crack tip interaction with the whisker/matrix may lead to changes in debonding behavior or influence other toughening mechanisms. The strain field in the Al2O3 matrix surrounding SiC whiskers was analyzed with a High Voltage Transmission Electron Microscope (HVEM). Strain contrast oscillations indicating the presence of residual stress in the specimen were observed in a Al2O3-5 vol % SiC composite having ≃15 μ grain size.The strain field was found to have both radial (perpendicular to whisker axis) and axial (parallel to whisker axis) components. A strain field was also present near the end faces of SiC whiskers. In situ thermal annealing to 573, 873, and 1173 K showed a decrease in the residual strain while in situ cooling to ≃77 K revealed little change in the strain. These results show that residual stresses in the compacts result from differences in thermal expansion and elastic constants of the matrix and whisker materials. Dynamic in situ fracture experiments performed in an HVEM on the Al2O3-5 vol % SiC having ≃1 μm as well as on Al2O3-20 vol % SiC having ≃1 μm grain size revealed that fracture resistance is due to a number of mechanisms including debonding near the whisker matrix interface, crack deflection, pinning, and bridging by SiC whiskers. Formation of secondary fractures and rocracks near and in front of propogating crack tips was also observed in the larger grain size composite.