Ceramic materials are utilized for a wide variety of applications, as structural as well as functional components. Besides their outstanding mechanical, chemical and electrical properties, they have a very brittle character, which results in low fracture toughness, compared to e.g. metals. In addition, notwithstanding the high strength of ceramics, critical defects of different size introduced during processing, machining or in service yield a scatter in the failure stress of ceramic components that reduces their mechanical reliability. The current design of ceramic materials in a “bio-inspired” layered architecture using either weak or strong interfaces, or with residual stresses has proved to be an effective barrier to the propagation of cracks from surface flaws, providing the material with a minimum design strength, and thus higher reliability. Recent work has demonstrated that tailoring the microstructure and architecture of such “bio-inspired” layered ceramics can significantly enhance their damage tolerance. A key is the combination of residual stresses and textured microstructure. The aim of this thesis was to investigate the combined effect of a tailored microstructure and architectural design to enhance the damage tolerance of alumina-zirconia based multilayer ceramics. Several monolithic and multilayer samples were fabricated via tape casting, combining different microstructures (i) equiaxed and (ii) textured. The monolithic materials were characterized according to their microstructural, thermo-physical and mechanical properties. Material properties as the degree of texture, density, Vickers hardness, E-modulus, coefficient of thermal expansion and fracture toughness were determined. The layered architectures, classified in periodic and non-periodic, were fabricated with the corresponding embedded layers having the same or different thickness, respectively. The anisotropic thermal expansion coefficient in alumina (and tailored addition of zirconia) will yield thermal strain mismatch between textured and non-textured microstructures, and thus in-plane residual stresses. In the textured layers residual compressive stresses were induced. The residual stresses were aimed to be of a small magnitude so that no edge cracking would occur, but still effective for fracture toughness increase. The samples were tested via 4-Point-Bending, considering (i) natural and (ii) artificial flaws. The bending strength was determined in samples containing natural flaws and analyzed using Weibull statistics. Concerning the samples with artificial (indentation) flaws, effects such as crack arrest, crack deflection and crack bifurcation were observed and discussed.