Ceramics are a promising insulating material for high temperature environment. To qualify for in-core use in nuclear reactors, there are many other materials requirements to be met, such as neutron irradiation resistance, corrosion resistance, low thermal conductivity, high coefficient of thermal expansion, high strength, high fracture toughness, ease of fabricability, etc. And among the promising ceramics meeting most of the requirements, with the exception of fabricability, is yttria-stabilized zirconia (YSZ). Like all ceramics, YSZ is hard, brittle and difficult to machine. At CanmetMATERIALS, YSZ-based composites for in-core insulation that are machine-able and capable of being formed into complex shapes have been developed. In this paper, the focus is geared towards the fabrication and property evaluation of such composites. In addition, the machinability aspect of the YSZ composites was addressed with a demonstration of a machined component.