Abstract: A kind of composite material of 316L stainless steel and Y₂O₃ partly stabilized zirconia (Y-PSZ) was prepared by powder metallurgic process. The effects of the content and size of 316L grains on the microstructure, relative density and hardness of the composite were investigated. The results showed that the relative density, shrinkage ratio and HRC value of the sintered samples decreased with the increase of 316L content. When the content of 316L kept constant, the relative density, shrinkage ratio and HRC value of the sintered samples decreased with the increase of 316L particle size. The relative density value was in the range from 92.5% to 95.5% in the present research conditions.