The effect of the addition of carbon nanofibers (CNFs) on the microstructure, fracture/mechanical and electrical properties of the CNF/zirconia composite has been investigated. The microstructure of both ZrO₂ and ZrO₂-CNF composites consists of a very low grain sized matrix (approximately 160 nm) with relatively well dispersed carbon nanofibers in the composite. The mechanical properties slightly decreased after the addition of CNFs to the ZrO₂ but the electrical resistivity decreased significantly, exhibiting approximately 0.1 Ω cm.