In purpose of introducing the inverse magnetostrictive properties into the structural ceramics, Al_2O_3 based nanocomposites dispersed with nano-sized Ni-Co particles were studied. The composites were fabricated by the hydrogen reduction and hot-pressing of Al_2O_3 and NiO-CoO mixed powders. The mixtures were prepared by using Ni- and Co-nitrate (Ni(NO_3)_2;cdot;6H_2O;and;Co(NO_3)_2;cdot6H_2O) as source materials for the Ni-Co particles. Microstructural observations revealed that nano-sized Ni-Co particles were dispersed homogeneously at Al_2O_3 grain boundaries. High strength above 1 GPa was obtained for the Al_2O_3/10 wt% Ni-Co nanocomposite fabricated by a controlled powder preparation process. The inverse magnetostrictive response to applied stress was obtained due to the presence of dispersed Ni-Co particles, which indicates a possibility to incorporate new functions into the structural ceramics without loosing the mechanical properties.