Indentation microcracking pattern and fracture toughness of the newly discovered cubic η and hexagonal κ intermetallic phases in the Ni-Si-Mg system, were studied. It is shown that the determination of the crack system as being either Palmqvist or halfpenny by simple polishing away of the indented surface is unreliable due to the existence of the core zone with compressive stresses. In the complex cubic η phase a serial sectioning method revealed so-called pseudo half-penny crack system, in the entire 200 to 2000 g range of indentation loads. On the contrary, at 200 and 500 g loads, the hexagonal κ phase develops the ‘kidney-shaped’ crack system which resembles the Palmqvist crack system but this phase develops the pseudo halfpenny crack system at 2000 g load. All the pseudo half-penny cracks, regardless of the applied load, at which they were formed, contain a compressive stresses core zone up to 40–50 μm deep. This is the first experimental evidence of such a zone being formed during microhardness indentation of intermetallics. In general, the existence of the indentation core zone in the pseudo halfpenny cracks does not seem to change the crack length-load characteristic of the halfpenny cracks allowing the use of existing equations for the penny-shaped crack system to calculate fracture toughness. However, equally reasonable indentation fracture toughness values are also obtained by using the Shetty et al. (Journal of Material Science , 1985, 20 , 1873) model, based on the Palmqvist crack system, which is modified in the present work. Our modification takes into account the indentation size effect (ISE) and yields results of K IC independent of indentation loads. Indentation fracture toughness calculated for the η and κ phases from the selected equations found in the literature for ceramics gives quite diverse results. The most reasonable values of indentation fracture toughness are obtained from the Palmqvist-type cracking using modified Shetty et al. model and from the half-penny-type cracking using Evans and Charles ( Journal of the American Ceramic Society , 1976, 59 (7/8), 371) and Lawn and Evans ( Journal of Material Science , 1977, 12 , 2195) models. The indentation fracture toughness values (customarily designated K IC ) calculated from the above models are on the order of 1.4−1.8 MPa m 1 2 for the η and 1.8−2.5 MPa m 1 2 for the κ phases.