Ceramic nanocomposites can be divided into three categories: intergranular nanocomposite, intergranular nanocomposite and nano/nano composite. The intra- and intergranular nanocomposites were found to show the two to five times higher toughness and strength at room temperature than those of monolithic materials. The hardness, toughness, strength and fracture resistance for creep and fatigue at high temperatures as well as the thermal shock fracture resistance were also strongly improved for these composites. On the other hand, the new function such as machinability and superplasticity was observed for the nano/nano composites. The fabrication processes of these nanocomposites by sintering methods, micro and nanostructure observations, improvements of mechanical properties were reviewed and the roles of the nano-size dispersoids were discussed. Finally the new approach on structural materials design will be given.