Aluminium-alumina compacts with varying wt% of alumina were compacted in the pressure range of 115 -290 MPa. Compacts prepared at 290 MPa pressure, were sintered in an argon atmosphere at 573, 673, 773 and 873 K for 1 hour. The green density, % porosity, % spring back and hardness of the green compacts were determined. Scanning Electron Microscopy was carried out to observe the morphology of pores and alumina particles in green and sintered compacts. The present study indicates that, densification of the compact increases with increasing compacting pressure and decreases with increasing alumina content. Maximum density achieved is 93% for pure aluminium compacts and decreases to 85% for Al-20 wt% alumina compacts. Grain growth of aluminium particles is noticed in the compacts after sintering at 773 and 873 K. Dispersion of fine alumina particle in the aluminium matrix occurs predominantly in the compact when sintered at 773 K which results in increase in hardness value.