Pure and dense nanocrystalline MgO with grain size ranging between 25 and 500 nm were prepared by hot-pressing. Vickers microhardness was found to increase with decrease in the grain size down to 130 nm, following the Hall-Petch relation. Further decrease in the grain size was followed by continuous decrease in microhardness. A composite model was used to describe the microhardness behavior in terms of plastic yield of the nanocrystalline grains accompanied by strain accommodation and nanocracking at the grain boundaries (gb's). Good agreement between the experimental and the calculated values indicates that gb's may have significant effect on strengthening and ductility of nanocrystalline-MgO ceramics in the nanometer size range. Critical grain size exists below which limited plastic deformation within the grains and nanocracking at gb's enhance the brittleness of the ceramic.