Dual-phase MgO–ZrO 2 ceramics are proposed for use in inert matrix fuel for disposition of plutonium and minor actinides in existing light water reactors. The concept for use of this composite material was developed with the intent to capitalize on the known advantages of the composite’s constituents: high thermal conductivity of MgO, and stability of ZrO 2 in LWR coolant. The study presented in this paper addressed the thermal conductivity and nitric acid solubility of MgO–ZrO 2 ceramics. Thermal analysis, based on experimental and analytical techniques, established that the product of all investigated compositions has the thermal conductivity superior to that of UO 2. Nitric acid dissolution experiments showed that only the free MgO phase dissolves in the nitric acid, leaving behind a porous pellet consisting of a ZrO 2-based solid solution.