Zirconia-titanium (ZrO2-Ti) composites have been considered potential thermal barrier graded materials for applications in the aerospace industry. Powder mixtures of Ti and 3 mol% Y2O3 partially stabilized ZrO2 in various ratios were sintered at 1500°C for 1 h in argon. The microstructures of the as-sintered composites were characterized by X-ray diffraction and transmission electron microscopy/energy-dispersive spectroscopy. Ti reacted with and was mutually soluble in ZrO2, resulting in the formation of α-Ti(O, Zr), Ti2ZrO, and/or TiO. These oxygen-containing phases extracted oxygen ions from ZrO2, whereby oxygen-deficient ZrO2 was generated. For relatively small Ti/ZrO2 ratios, specimens with ≤30 mol% Ti, TiO were formed as oxygen could be sufficiently supplied by excess ZrO2. For the specimens with ≥50 mol% Ti, lamellar Ti2ZrO was precipitated in α-Ti(Zr, O), with no TiO being found. Both m-ZrO2-x and t-ZrO2-x were found in specimens with ≤50 mol% Ti; however, only c-ZrO2-x was formed in the specimen with 70 mol% Ti. As ZrO2 was gradually dissolved into Ti, yttria was retained in ZrO2 because of the very limited solubility of yttria in α-Ti(O, Zr) or TiO. The concentration of retained yttria and the degree of oxygen deficiency in ZrO2 increased with the Ti content. The complete dissolution of ZrO2 into Ti was followed by the precipitation of Y2Ti2O7 in the specimen with 90 mol% Ti.