Nb2O5 and Zr powders at a molar ratio of 1:2.5 were milled using a high-energy ball mill. The mixture powders produced Nb and ZrO2 nanopowders through a solid replacement reaction (Nb2O5+ 2.5Zr 2Nb + 2.5ZrO2). The synthesized nanopowders were consolidated via high-frequency induction heated sintering (HFIHS) within two min. The mechanical properties (hardness and fracture toughness) of nanostructured 2Nb–2.5ZrO2 composite were then evaluated. Both the hardness and fracture toughness of the 2Nb–2.5ZrO2 composite were higher than those of monolithic ZrO2.