An X‐ray diffraction technique was used to measure the residual surface stresses on ground surfaces of Al2O3/ZrO2 (tetragonal) composites. To accomplish this, it was necessary to use a radiation for which the penetration depth was small (large wavelength), e.g. CrKα radiation. It was found that these materials could have compressive stresses as high as 1 GPa on their surface, which is a result of the molar volume associated with the tetragonal‐to‐monoclinic ZrO2 phase transformation. This transformation was induced by the grinding stresses and a reasonable correlation between the amount of ZrO2 transformed and the magnitude of the residual stresses was established. Evidence was found that the transformation depth is controlled by the amount of stabilizing oxide added to the ZrO2 and by the ZrO2 grain size. In the materials studied, transformation depths were found to be typically <20 μm.