Hydroxylapatite (HA) has been widely used in biomedical applications because of its excellent biocompatibility in the human body. A total of 25 wt% monoclinic (m) zirconia-HA composites (with and without 5 wt% MgF2) were synthesized to investigate their mechanical properties and phase stability. In HA-m-ZrO2 composites, HA and m-ZrO2 reacted to form CaZrO3 when there was no F- present in the composite and M-ZrO2 partially transformed to tetragonal ZrO2. When MgF2 was added into the system, it improved the thermal stability of the phases, densification, hardness, and fracture toughness of the composites and it caused the m-ZrO2 to transform completely to t-ZrO2 by incorporating the Mg2+ ions present in MgF2 in the ZrO2. Moreover, the stability of HA was improved by incorporating the F- ions from MgF2 in place of OH- ions in HA. Substitution of OH- by F- ions was verified by the change in HA's hexagonal lattice parameters. A fracture toughness of 2.0 MPa root m was calculated for the composite containing MgF2.