Phase transformations during consolidation treatments of an attrition-milled amorphous yttria-partially-stabilized zirconia (Y-PSZ: ZrO2-3 mol% Y2O3)-20 mol% Al2O3, powder and the resulting microstructures have been investigated. A metastable cubic phase (c-ZrO2 solid solution) together with an alpha-Al2O3 phase is formed in the amorphous matrix by consolidation at temperatures below 1204 K. The metastable cubic phase transforms to a stable tetragonal phase (t-ZrO2 solid solution) with an increase in the consolidation temperature. Fully dense bulk samples consisting of extremely fine tetragonal grains together with a small amount of alpha-Al2O3 particles could be obtained by consolidation at temperatures above 1432 K. Important features concerned with the densification behavior are as follows: (1) Marked increase in the relative density occurs after cubic crystallization and subsequent cubic-to-tetragonal transformation. (2) All of the consolidated bulk samples show extremely fine grain structure with grain sizes of several tens of nanometers, irrespective of the consolidation temperature. (3) The regularity of the lattice fringe contrast in each tetragonal grain seems to be kept in the vicinity of grain boundaries. These results suggest that densification of the attrition-milled amorphous powder proceeds via superplastic flow and/or diffusional creep, rather than viscous flow of the initial amorphous phase before crystallization.