<p>In this study, the effect of cerium oxide (CeO₂) addition ranging from 0.5 to 2.5 wt% on the sintering ability, thermal stability, grain morphology, densification, hardness, fracture toughness, brittleness index, machinability, in vitro bioactivity and MTT cytotoxicity behaviour of sheep hydroxyapatite-2.5 wt% yttria stabilized zirconium oxide (SHA-2.5 wt% ZrO₂) composite was investigated. Increasing in the CeO₂ ratio caused to increase in decomposition of SHA-2·5 wt%ZrO₂ from 5.3% to 5.7%, but inhibited the formation of alpha-tricalcium phosphate (α-TCP). Adding CeO₂ at an amount of 0.5 wt% improved the thermal stability and mechanical reliability of SHA-2·5 wt%ZrO₂. It also improved machinability with drilling and allowed its in vitro bioactivity to decrease from 28 to 14 days. The MTT cytotoxicity assessment revealed that adding CeO₂ at an amount of 0.5 wt% caused the cell viability on the surface of SHA-2.5 wt% ZrO₂ composite to increase from 92.5% to 103% at the end of 1st day, but to decrease from 84% to 68.8% at the end of 7th day.</p>