Yttria and ceria toughened alumina (YCTA) ternary ceramic composite were developed for cutting tool application. Alumina, ceria and yttria powders were mixed with polyvinyl alcohol and uniaxially pressed. The green compacts were sintered, subsequently hot isostatically pressed (HIPed) and finish machined in the form of cutting tool inserts. The densities of the green compacts and the sintered and the HIPed specimens of YCTA were evaluated. The mechanical properties of the sintered and the HIPed specimens of YCTA were also evaluated. Machining studies were conducted using the newly developed YCTA inserts on grey cast iron work piece. For comparison, the commercially available zirconia toughened alumina (ZTA) inserts and silicon carbide whisker reinforced alumina (SCWRA) inserts were also used for the machining studies. The performance of YCTA inserts is compared with that of the ZTA and SCWRA inserts.