A new High Frequency Induction Heating (HFIH) process has been developed to fabricate dense Al_2O_3 reinforced with Fe-Ni magnetic metal dispersion particles. The process is based on the reduction of metal oxide particles immediately prior to sintering. The synthesized Al_2O_3/Fe-Ni nanocomposite powders were formed directly from the selective reduction of metal oxide powders, such as NiO and Fe_2O_3. Dense Al_2O_3/Fe-Ni nanocomposite was fabricated using the HFIH method with an extremely high heating rate of 2000°C/min. Phase identification and microstructure of nanocomposite powders and sintered specimens were determined by X-ray diffraction and SEM and TEM, respectively. Vickers hardness experiment were performed to investigate the mechanical properties of the Al_2O_3/Fe-Ni nanocomposite.