Several fabrication processes, corresponding nanostructural features and multifunctionality as well has been investigated for oxide ceramic based nanocomposites with metal nanodispersion (i.e., ceramic/metal nanocomposites). Transition metal (Ni, Co, etc) dispersed alumina and zirconia based nanocomposites have been synthesized by reducing and hot-press sintering of ceramic and metal oxide mixtures prepared by several method. Improved fracture strength (1.1 and 1.9 GPa for and nanocomposites, respectively) of these composites have been achieved according to their nanostructures. In addition, ferromagnetic characteristic has been kept. The variation of magnetization with an applied stress has found to be more sensitive as smaller as the magnetic metal dispersion is. This result thus suggests the possibility of fracture and/or stress sensing of the composites by simple magnetic measurement.