Effect of YNbO4 addition on the fracture toughness and stress-strain characteristics of ZrO2(3Y) ceramics was investigated using micro-indentation, X-ray diffractometry and in-situ compression-diffraction techniques in the present work. X-ray diffraction patterns show that sintering of YNbO4 and ZrO2(3Y) mixture results in formation of a solid solution, and the tetragonality of ZrO2(3Y) ceramics increases with the content of YNbO4. The ratio of 002(t) to 200(t) peak intensity in X-ray diffraction spectra of the specimens changes significantly after a grinding process at low fractions of YNbO4 (less than 5 mol%) and approaches to a constant value as the content of YNbO4 is higher than 5 mol%, implying that the addition of YNbO4 reduces the domain switchability of the ZrO2(3Y) ceramics. Fracture toughness of modified-ZrO2(3Y) specimens with the same heat treatment conditions could be greatly enhanced by an appropriate addition of YNbO4. In addition, stress-strain curves of YNbO4-modified ZrO2(3Y) specimens exhibit an extraordinary elastic behavior. Data of in-situ loading-diffraction experiment show that an unidentified stress-induced transformation occurs and the peak intensity varies with the stress conditions. Analysis of the stress-strain characteristics and X-ray diffraction results suggest that the fracture toughness of the specimens cannot be simply attributed to the t-to-m phase transformation.