An experimental investigation is carried out to coat two types of carbide powders, TiC and (W, Ti)C, with an alumina ceramic using a sol-gel technology. The coated carbide powders are then fabricated into two kinds of new ceramic tool materials by the hot pressing method. A scanning electron microscope (SEM) observation reveals that in general the matrix (carbide) grains are uniformly coated with the alumina ceramic and the microstructure of the new tool materials is more homogeneous than that of conventionally made ceramics. The tests of mechanical properties and wear resistance in machining are finally conducted. It is shown that when machining a mild carbon steel the new tool materials can increase the tool-life by up to 100% as compared to other two ceramic tool materials that have the same matrix but fabricated in the conventional way, while the fracture toughness is improved by up to 33%. When compared with a hard coated carbide tool, the new materials exhibit a superior ability in maintaining the wear resistance during the entire tool-life.