A suspension of zirconia powder (TZ3YSE) with a solids loading of 50. vol% was prepared by ball milling. Binders were added and some of the suspension was diluted to 40, 30 and 20. vol% before freeze granulation was performed. A spray dried material (TZ3YSEB) was used as a reference. The pore size distribution of the different granules was evaluated and from the microstructure it was shown that inhomogeneities were present in both the freeze granulated as well as in the spray dried granules. In addition, the density, microstructure as well as the strength of sintered materials prepared from the granules were studied. The results showed that a high green density or sintered density was not sufficient in order to achieve a high strength material. It was further shown that the strength was significantly influenced by the granule density and not by the inhomogeneities found in the granules.